Buy eClerx Services Ltd For Target Rs.1680 - ICICI Direct
Turns ex-bonus today
About the stock: eClerx Services (eClerx) provides business process management, automation and analytics services.
? It caters to financial services, communications, retail, media, manufacturing, travel and technology companies
? OCF to EBITDA of >80%, debt free and RoCE of >20%
Turns ex-bonus today:
? The company had made an announcement regarding bonus issue on August 10. The issue of bonus shares is in the ratio of 1:2 i.e. one new bonus equity share each for every two existing equity shares
? Ex-bonus date is today i.e. September 21 and record date for the same is September 22. Accordingly, the share price has been adjusted to opening price of | 1,447/share against closing price of | 2,171/share yesterday
? Hence, we revise our target price to | 1,680/share post this corporate action. We maintain our BUY rating on the stock and value eClerx based on 16x P/E on FY24 EPS
Key triggers for future price performance:
* Traction in customer care, RPA, analytics & content development, cross sell and up sell to Personiv clients to drive growth
* Lower roll-offs, improving deal wins and revival in growth are expected to drive revenues
* Expect dollar revenues to grow at 17.8% CAGR in FY22-24E
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