Company Details

eClerx Services (ESL) is a company, providing knowledge process outsourcing (KPO) services.

Incorporated in 2000, ESL optimises core day-to-day processes of its clients. With 5,837 employees, the

company provides services using a mix of data analytics and customised process solutions from its offshore

delivery centers in India.

ESL’s services portfolio comprises data analytics, operations management, data audits, metrics

management and reporting services while delivery teams consists of generalists, domain specialists and in-

house software professionals who automate and streamline existing clients’ processes trade processing,

reference data, accounting and finance and expense management activities. The Company’s professional

services practice includes consulting, business analysis, and solution testing. For the cable and telco

industry, it offers a range of services that span all lines of business (data, video, and voice), all support

channels (chat, email, and phone), and multiple functional areas (care, repair, billing, retention, sales and

technical operations.

eClerx is a strongly differentiated play in India’s burgeoning KPO space and stands out by virtue of its

business model. The company has built a strong and relatively uncontested position in specific high

opportunity segments such as data analytics & management and process improvement solutions thus

positioning itself as an established provider of specialised services. It inks multi‐year annuity contracts

facilitated by ongoing engagements, which has helped the company forge a predictable revenue stream

leading to attractive profitability.

The current market capitalization stands at Rs 3,964.14 crore. The company has reported a consolidated

sales of Rs 231.83 crore and a Net Profit of Rs 62.29 crore for the quarter ended Sep 2014.

Category No. of Shares Percentage

Promoters 7,964,436 26.25

ForeignInstitutions 9,233,869 30.43

ForeignPromoter 7,946,683 26.19

Nbanks Mutual Funds 2,374,084 7.82

GeneralPublic 1,862,387 6.14

Other Companies 695,053 2.29

Foreign NRI 141,339 0.47

Financial Institutions 113,717 0.37

Others 9,318 0.03

Market Cap (Rs Cr) – 3964.14

Company P/E – 17.07

Industry P/E – 16.13

Book Value (Rs) – 177.58

Dividend (%) – 350 %

EPS (TTM) – 76.58

Dividend Yield (%) – 2.68 %

Face Value (Rs) - 10

Share Holding Pattern Financial Details

Balance Sheet

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Sources Of Funds

Total Share Capital 30.18 29.88 29.06 28.85 19.03

Equity Share Capital 30.18 29.88 29.06 28.85 19.03

Reserves 508.25 380.87 306.07 204.70 180.25

Networth 538.43 410.75 335.41 233.88 199.53

Total Debt 0.00 0.00 0.00 0.00 0.00

Total Liabilities 538.43 410.75 335.41 233.88 199.53

Application Of Funds

Gross Block 104.81 95.45 79.58 62.46 43.34

Less: Accum. Depreciation 62.05 50.20 36.87 32.91 24.30

Net Block 42.76 45.25 42.71 29.55 19.04

Capital Work in Progress 1.18 0.32 4.50 6.53 2.21

Investments 212.06 161.74 100.64 28.58 90.86

Sundry Debtors 82.78 56.49 42.11 65.94 39.23

Cash and Bank Balance 222.49 169.50 161.29 16.38 30.21

Total Current Assets 305.27 225.99 203.40 82.32 69.44

Loans and Advances 166.10 126.01 100.15 69.72 50.43

Fixed Deposits 0.00 0.00 0.00 132.89 15.12

Total CA, Loans & Advances 471.37 352.00 303.55 284.93 134.99

Current Liabilities 39.52 31.81 33.86 36.48 22.66

Provisions 149.44 116.75 82.13 79.21 24.90

Total CL & Provisions 188.96 148.56 115.99 115.69 47.56

Net Current Assets 282.41 203.44 187.56 169.24 87.43

Total Assets 538.41 410.75 335.41 233.90 199.54

Contingent Liabilities 8.31 2.44 3.33 3.97 6.81

Book Value (Rs) 178.42 137.49 115.33 80.94 104.71

Profit and Loss Account

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Income

Sales Turnover 713.38 570.92 472.47 341.91 257.02

Net Sales 713.38 570.92 472.47 341.91 257.02

Other Income 15.76 -20.68 22.33 11.37 -10.59

Total Income 729.14 550.24 494.80 353.28 246.43

Expenditure

Employee Cost 215.23 182.10 158.39 118.96 83.36

Other Manufacturing Expenses 0.00 0.00 0.00 43.72 36.83

Selling and Admin Expenses 0.00 0.00 0.00 28.54 23.41

Miscellaneous Expenses 190.56 161.77 128.40 18.39 14.63

Total Expenses 405.79 343.87 286.79 209.61 158.23

Operating Profit 307.59 227.05 185.68 132.30 98.79

PBDIT 323.35 206.37 208.01 143.67 88.20

PBDT 323.35 206.37 208.01 143.67 88.20

Depreciation 14.33 15.73 12.56 8.90 6.85

Profit Before Tax 309.02 190.64 195.45 134.77 81.35

PBT (Post Extra-ord Items) 309.02 190.64 195.45 123.45 81.35

Tax 62.51 34.71 38.12 16.21 8.76

Reported Net Profit 246.51 155.92 157.33 118.56 72.59

Total Value Addition 405.80 343.87 286.79 209.60 158.23

Equity Dividend 105.62 74.69 50.85 64.92 33.37

Corporate Dividend Tax 17.95 12.69 8.25 10.53 5.60

Per share data (annualised)

Shares in issue (lakhs) 301.77 298.75 290.58 288.54 190.31

Earning Per Share (Rs) 81.69 52.19 54.14 41.09 38.14

Equity Dividend (%) 350.00 250.00 175.00 225.00 175.00

Book Value (Rs) 178.42 137.49 115.33 80.94 104.71

Dividend and Bonus History

Index and Company Comparison

Company Forecast

PBIT – 309.12 cr v/s 190.63 cr

RoCE – 65.11 v/s 51.1

RoE – 52.04 v/s 41.89

Net Profit Margin – 33.8 v/s 28.33

Return on net worth – 45.78 v/s 37.96

Current Ratio – 2.49 v/s 2.37

Reserves – 508.25 cr v/s 380.87

PAT – 246.51 cr v/s 155.92 cr

Total assets – 538.41 cr v/s 410.75 cr

Net sales – 713.38 cr v/s 570.92

Book Value – 178.42 v/s 137.49

Days BSE NSE

30 1284.28 1285.37

50 1267.24 1268.51

150 1275.73 1276.42

200 1253.23 1253.87

Important Ratios Simple Moving Average

Recommendations

Buy eClerx Services Ltd at current or lower

market levels

Reasons for the recommendations are :

Sound financial position of the company.

Good dividend payout history of the company.

Higher margins when compared with peers.

Well diversified product mix.

Improved QoQ performance of sales.

Share holdings by major Mutual Funds.

Under performance of the stock price in last year.