ECLERX - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.2

eClerx Services Ltd. (ECLERX) is a niche IT services company with impressive financial fundamentals and capital efficiency. While valuation is lofty and earnings momentum has softened slightly, the company stands out for strong return metrics and low debt. Here's the full breakdown

📊 Core Financials Snapshot

Return Metrics

ROCE: 29.1%, ROE: 23.8% — excellent capital utilization; best-in-class for mid-cap IT

EPS: ₹116 — earnings strength validates pricing

PAT Qtr: ₹142 Cr ↓ from ₹152 Cr — dip in profits; warrants monitoring but not alarming

Quarterly Profit Variation: +26.8% YoY — solid growth base

Debt & Liquidity

Debt-to-Equity: 0.16 — low leverage; adds to financial resilience

Dividend Yield: 0.03% — minimal payout, prioritizing reinvestment

💰 Valuation Insights

Metric Value Interpretation

P/E Ratio 32.0 At par with industry; fair pricing for growth visibility

P/B Ratio ~7.92 High premium over book value; justified by earnings power

PEG Ratio 3.41 Elevated — implies stock may be ahead of growth curve

High PEG signals caution; investors should temper expectations for sharp earnings acceleration from current levels.

🖥️ Business Model & Competitive Strength

Segment Focus: Digital analytics, automation, data management for BFSI, retail, and media

Moat

Deep domain expertise in process optimization

Long-term contracts with Fortune 500 clients

Cost arbitrage and specialized analytics capabilities

Tailwinds

Rising demand for AI-led solutions and customer experience management

Digital transformation acceleration in legacy enterprises

📉 Technical Overview

RSI: 62.5 — near overbought; watch for short-term cooling

MACD: 75.7 — bullish momentum is active

DMA Status

CMP above 50-DMA (₹3,460) and 200-DMA (₹3,121) — confirms uptrend

52W Index: 89.0% — nearing 52-week highs; stock already rallied well from ₹2,116

🎯 Entry Zone & Long-Term View

Suggested Entry Zone: ₹3,600–₹3,680 — wait for slight dip or consolidation

Target (12–18 months): ₹4,200–₹4,400 — if earnings stabilize and valuation holds

Investor Suitability

Best for long-term, quality-focused investors in digital IT

Avoid short-term positions unless technical reversal emerges

Key monitorables: client retention, margin stability, and new vertical wins

Want to dive into how eClerx stacks up against Tata Elxsi, Persistent Systems, or Happiest Minds in terms of margin profile and innovation pipeline? I can sketch out that battle map too — let’s go deeper. 💻📈🔍

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