ValuePickr Forum

Eclerx ~ Process Management & Data Analytics Firm

I agree One of the best stocks
Margins consistently over 35%
debt 0
ROCE of above 50%
Promoter driven company, with promoter age 42 years
moving into digital
risks are that company takes projects which last 1 to 3 years and company need to keep getting businesses,
I agree one of the best stock

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Great results
Profit increased to 95 cr from 75 same quarter last year and management had announced share buy back also
Story looks promising any comments

Yes, results are very good. I am ruing the fact that I did not add more at 1400/- a month back. Now price will shoot up till the buyback is in vogue. I see prices going up to 2200/-.

Results were good YoY. But profit margins fell QoQ.

I sold out my holding today because the score of Eclerx fell my my rating system. Might reconsider buying if there is a price correction.

eClerx seems a very solid stock. It is trading near its Intrinsic value which is very rare when market is at peak and none of the quality stocks are available at cheap price.

In my views eClerx must be hold for 8-10 years of horizon with 50% investment now and remaining 50% on every dip.

8-10 years! That is a very long term horizon.

Yes it’s a long term hold.

You have perfectly nailed the point related to MOAT. I would like to add that one can compare eclerx with GENPACT (NYSE:G) which is Indian KPO listed on NYSE.

If you looks at G apparently shareholder value creation has not been that phenomenal. I might be wrong as my statement is just on the basis of max available share price chart.

The only important question right now for me is GROWTH and challenge coming from AUTOMATION. Very soon artificial intelligence will kill lots of back office processes which eclerx champion.

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Hi Atul,

Why and how do you think that AI will kill back office processes? Are they so repetitive in nature that the pattern of work can be easily captured by a sophisticated algorithm?

I thought that there are a lot of nuisances and corner cases involved in these office work.

Picking up the easier pattern by an intelligent agent and introducing itself into the system creates even more complexity and corner cases.

In my opinion, AI would actually drastically increase the human work due to more complexity getting introduced. Only the nature of human work would change.

I might be wrong though.

Regards.

Hi Nishant:

Though I am not a subject matter expert on this going by news available in media and my own experience of working in bank I feel a lot can be automated easily. For example reconciliation, counter party confirmation and recording transactions are things which can be automated. Human intervention will be required but at a very high level i.e. for supervision and monitoring. So you will be able to achieve a lot with less number of people. Now if eclerx has ability to retain benefit of this efficiency and apply news techniqucies to achieve this kind of effiiency is a thing to watch.

Though right now even I think all this is quite a futuristic thinking. However, we should not ignore that pace of change is quite fast.

I am providing two links which may be helpful :slight_smile:

Complex job of auditing expense bill is being automated.

Automation risks 69 per cent jobs in India, says World Bank
http://economictimes.indiatimes.com/jobs/looming-threat-automation-risks-69-per-cent-jobs-in-india-says-world-bank/articleshow/54687904.cms

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Yes, tasks such as reconciliation and counterparty confirmation have already been automated. They do not present any new threat to I.T. companies. But the point raised pertains to Artificial Intelligence (AI) and not automation.

AI goes beyond automation. AI can process data far more efficiently than humans, and recognize speech, image, text and patterns of online behavior. In AI, the computer “learns” over time. The computer analyses new information, compares it with existing data and identifies patterns, similarities and differences. Over time, it improves its ability to classify information and predict, making it easier to take data-driven decisions. AI helps to customize service delivery to each individual. For example, in a banking context, the computer can analyze your income & spending patterns and make customized recommendations. KYC, Anti-Money Laundering and Regulatory Compliance are some of the other areas where AI is expected to make an impact.

Though reports suggest automation is picking up, whether it presents a threat or an opportunity is difficult to say. I think a lot depends on each company’s individual profile and how it responds to the challenge.

I feel digital gateways will create much more opportunities for this company
We should not forget that the company has a relationship with Fortune 500 companies and is able to command EBITDA margins of more than 35 percent continuously for last many years which is much more than simple BPO or any other simple accounting work
I am sure they will find out much more opportunities now then before
I am invested since last 2 years with 30 percent of my portfolio

Can any of existing investors, or trackers throw some light on the real value that E-clerx offers? The following is from their website. In one of their services, I also read KYC compliance, so at least that stream of revenues is guaranteed with our government constantly changing KYC norms and seeking validation every few years :nerd:

eClerx Services Ltd has informed BSE that the Share Buyback Committee of Board of Directors of the Company at its meeting held on October 14, 2016, which commenced at 06.45 p.m. and concluded at 8.01 p.m., inter alia, have determined the Final Buyback Price of Rs. 2,000/- (Rupees Two Thousand Only) (the “Buyback Price”) and the final amount for Buyback to be Rs. 2,340 million (Rupees Two Thousand Three Hundred and Forty million Only) (the “Buyback Size”) excluding the transaction costs viz. brokerage, applicable taxes such as securities transaction tax, service tax, stamp duty etc. With the Buyback price of Rs. 2,000/- (Rupees Two Thousand Only) and Buyback Size of Rs. 2,340 million (Rupees Two Thousand Three Hundred and Forty million Only), the total number of shares to be bought back in the Buyback shall be 1,170,000 Equity Shares, representing about 2.87% of the total issued and paid-up equity capital of the Company as on March 31, 2016.The aforesaid terms of Buyback are within the maximum limits approved by the Board of Directors at its meeting held on August 29, 2016, and as approved by shareholders by special resolution, through postal ballot, results of which were announced on October 14, 2016.

eClerx Services Ltd has informed BSE that the Company has fixed Record Date as October 28, 2016 for ascertaining entitlement for Buyback of equity shares.

Question remains when and how buyback will be done?

I started reading about Blockchain and I feel this is likely to be a disruptor in the BAck office accounting industry.

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Any idea on why this dropped 9% today?

Yesterday was last day for BUYBACK book closure, so that support gone

There is buy back going on in eclerx. People must be selling it to avoid price risk till tenderin date is announced. Last date to become eligible to tender was yesterday.

Why is tax rate so low for eClerx?