⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
ECLERX - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | ECLERX | Market Cap | 15,109 Cr. | Current Price | 3,172 ₹ | High / Low | 4,995 ₹ |
| Stock P/E | 34.6 | Book Value | 307 ₹ | Dividend Yield | 0.03 % | ROCE | 28.8 % |
| ROE | 23.6 % | Face Value | 10.0 ₹ | DMA 50 | 4,102 ₹ | DMA 200 | 4,029 ₹ |
| Chg in FII Hold | 0.49 % | Chg in DII Hold | -1.19 % | PAT Qtr | 126 Cr. | PAT Prev Qtr | 110 Cr. |
| RSI | 19.7 | MACD | -318 | Volume | 1,56,758 | Avg Vol 1Wk | 1,40,063 |
| Low price | 2,116 ₹ | High price | 4,995 ₹ | PEG Ratio | -32.3 | Debt to equity | 0.18 |
| 52w Index | 36.7 % | Qtr Profit Var | 51.4 % | EPS | 91.8 ₹ | Industry PE | 22.0 |
📊 Financial Overview
- Revenue & Profitability: PAT improved to 126 Cr. from 110 Cr. QoQ, showing growth momentum. EPS at 91.8 ₹ indicates strong earnings power.
- Margins & Returns: ROCE at 28.8% and ROE at 23.6% reflect excellent efficiency and shareholder value creation.
- Debt Position: Debt-to-equity ratio of 0.18 is moderate, balance sheet remains stable.
- Cash Flow: Dividend yield at 0.03% is negligible, reinvestment focus rather than income distribution.
💹 Valuation Indicators
- P/E Ratio: 34.6 vs. industry average of 22.0 → overvalued relative to peers.
- P/B Ratio: Current Price 3,172 ₹ / Book Value 307 ₹ ≈ 10.3, premium valuation.
- PEG Ratio: -32.3 → negative, reflecting weak growth prospects relative to valuation.
- Intrinsic Value: CMP appears above fair value, limiting upside potential despite strong fundamentals.
🏢 Business Model & Competitive Advantage
- Global IT and business process outsourcing services provider.
- Strong ROCE and ROE demonstrate superior capital efficiency.
- Moderate debt ensures financial flexibility, but valuation multiples remain stretched.
📈 Technical & Entry Zone
- RSI at 19.7 → oversold, potential rebound zone.
- MACD negative (-318), showing strong bearish momentum.
- Support zone: 2,800–3,000 ₹ (entry zone for cautious accumulation).
- Resistance: 4,000–4,100 ₹ (DMA levels).
✅ Positive
- Strong ROCE (28.8%) and ROE (23.6%).
- Quarterly PAT growth (+51.4%) highlights operational improvement.
- FII holdings increased (+0.49%), showing foreign investor confidence.
⚠️ Limitation
- P/E ratio (34.6) above industry average, indicating overvaluation.
- PEG ratio (-32.3) suggests weak growth prospects.
- Dividend yield (0.03%) is negligible, limiting appeal for income investors.
📰 Company Negative News
- DII holdings reduced (-1.19%), showing weaker domestic institutional confidence.
- Stock corrected sharply from 52-week high (4,995 ₹).
🌟 Company Positive News
- Quarterly PAT improved compared to previous quarter.
- FII holdings increased, signaling foreign investor support.
🏭 Industry
- Industry P/E at 22.0, lower than company’s 34.6 → peers are cheaper.
- IT and outsourcing sector remains resilient with long-term demand for digital transformation.
🔮 Conclusion
- ECLERX shows strong fundamentals with high ROCE, ROE, and consistent profit growth.
- However, valuation is expensive compared to peers, and growth outlook remains weak.
- Entry Zone: 2,800–3,000 ₹ for cautious accumulation.
- Long-Term View: Attractive for growth-focused investors; accumulation at lower levels advised due to stretched valuation and weak dividend yield.