eClerx Services zooms 20%, nears record high on healthy Q4 results

In Q4FY21, the company's revenues grew 19.3 per cent QoQ in constant currency terms and 19.7 per cent QoQ in reported terms

Shares of eClerx Services were locked in 20 per cent upper circuit at Rs 1,617.35 on the BSE on Friday after the company reported healthy March quarter numbers (Q4FY21) with revenues up 19.3 per cent quarter on quarter (QoQ) in constant currency terms and 19.7 per cent QoQ in reported terms. The stock had hit a record high of Rs 1,775, in August 2016.

Till 09:32 am, a combined 192,000 shares have changed hands, so far, and there were pending buy orders for around 45,000 shares on the NSE and BSE. In comparison, the S&P BSE Sensex was up 0.60 per cent at 52,616 points.

In Q4FY21, the company’s profit after tax grew 39 per cent QoQ at Rs 98.8 crore. EBIT (earnings before interest and tax) margins improved 295 basis points (bps) to 27.6 per cent mainly led by lower sales & development expenses and higher gross margins. The company said total delivery headcount as of March 31, 2021 stands at 11,831 – an increase of 40 per cent year on year.

eClerx provides business process management, automation and analytics services to a number of Fortune 2000 enterprises, including some of the world's leading financial services, communications, retail, fashion, media & entertainment, manufacturing, travel & leisure and technology companies.

The company is witnessing improving growth in customer care, RPA, analytics and content development. In addition, eClerx could benefit from cross sell and up sell to Personiv clients. This, coupled with lower roll offs from one off client specific event, improving deal wins and revival in growth are expected to drive revenues. This along with reasonable valuation, healthy balance sheet prompts us to be positive on the stock, ICICI Securities said in a note.