CLSA Research in a report said,
eClerx shares have under-performed the sector in FY15 due to challenges in its top-5 accounts, margin erosion from investments in S&M and mix change to lower margin Cable business. With non-top 5 now over a third of revenues growth outlook appears more certain. Billing rate hikes from top 5 customers in FY16 and currency support should support margin stability driving high teens earnings growth. eClerx remains a high quality business that appears past its earnings slowdown.
We upgrade to BUY, valuing eClerx at 16x Mar ’17 PE, 25% discount to TCS. CLSA Stock Target price on eClerx is Rs 1700
