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INVESTMENT INSIGHTS

Check Before You Invest : eClerx Services Ltd

BSE: 532927 NSE: ECLERX ISIN: INE738I01010
  |   Sector:  IT & ITES   |   Industry:  BPO/ITeS

Snapshot

Q.1 Which industry/sub-sector does eClerx Services Ltd belong to?
eClerx Services Ltd belongs to the IT & ITES sector, operating specifically within the BPO/ITeS segment.
Q.2 Is eClerx Services Ltd a good quality company?
eClerx Services Ltd is a good quality company, based on a consistently good 10-year financial track record.
Q.3 Is eClerx Services Ltd undervalued or overvalued?
eClerx Services Ltd appears Fair, as its key valuation ratios are in line with their past averages.
Q.4 Is eClerx Services Ltd a good buy now?
eClerx Services Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of eClerx Services Ltd?
eClerx Services Ltd revenue growth is 15.1% for FY-2025, which is below its 5-year CAGR of 18.55%, indicating slower growth.
Q.2 Return on capital employed (ROCE) of eClerx Services Ltd?
eClerx Services Ltd Return on capital employed is 33.15% for FY-2025, which is below its 5-year historical median of 36.02%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.
Q.3 Return on Asset of eClerx Services Ltd?
eClerx Services Ltd Return on Asset is 18.26%, which is below its 5-year historical median of 20.11%, indicating deteriorated asset utilization efficiency.
Q.4 Return on Equity (ROE) of eClerx Services Ltd?
eClerx Services Ltd Return on equity is 24.28% for FY-2025, which is below its 5-year historical median of 26.13%, indicating the business is making worse use of its shareholders capital.
Q.5 Cash conversion cycle of eClerx Services Ltd?
eClerx Services Ltd Cash conversion cycle is 69 days, above its 5-year historical median of 55 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover 1.14 1.14
ROE 24.28 26.13
ROCE 33.15 36.02
Cash Conversion Cycle 69 days 55 days
Q.6 Gross Profit margin of eClerx Services Ltd?
eClerx Services Ltd Gross profit margin which is the profit after deduction of direct costs, is 25.5% for FY-2025, which is below its 5-year median of 29%, indicating decreasing margins.
Q.7 Operating Profit Margin of eClerx Services Ltd?
eClerx Services Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 24.43% for FY-2025, which is below its 5-year median of 27.32% indicating decreasing margins.
Q.8 Net Profit Margin of eClerx Services Ltd?
eClerx Services Ltd Net Profit Margin is 16.08% for FY-2025, is below with its 5-year median of 18.08%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin 25.5 29
Operating Profit Margin 24.43 27.32
Net Profit Margin 16.08 18.08
Q.9 Debt to Equity ratio of eClerx Services Ltd?
eClerx Services Ltd Debt-to-Equity ratio is 0.00, which is lower with the industry average of 0.17, indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of eClerx Services Ltd?
eClerx Services Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of eClerx Services Ltd?
Promoters hold 54.52% of the eClerx Services Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of eClerx Services Ltd vs industry peers?
eClerx Services Ltd revenue CAGR is 18.55%, compared to the industry median CAGR of 10.13%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth 15.1 10.1
Gross Profit Growth 5.3 10.8
Operating Profit Growth 4.3 NAN
Net Profit Growth 5.7 8.5
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover 1.14 0.72
ROE 24.28 10.43
ROCE 33.15 15.4
Cash Conversion Cycle (days) 68.87 45

Valuation & price assessment

Q.1 Stock return of eClerx Services Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 12.3% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price
CAGR		 12.3% 27.8% 27.1% 13.2%
Q.3 Valuation ratios of eClerx Services Ltd vs historical?
The current P/E is lower that its historical median.
Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 20.08 22.47 30.41
Price to Book 4.69 5.66 2.76
Price to Sales 3.44 4.18 4.20
EV to EBITDA 11.58 13.60 15.56

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