eClerx Services shares drop 5% as IT firm announces share buyback, Q4 show

Shares of eClerx Sevices slid 5 per cent at Rs 2282.35 per share on the BSE in Friday’s intraday trade. The stock prices cracked after the company reported a weak quarter-four on a sequential basis for the fiscal year 2023-24 (Q4FY24) on Thursday. Along with this, the IT firm also approved a buyback of its 13.75 lakh equity shares. 

eClerx plans to allocate up to Rs 385 crore for its buyback, equivalent to 24.98 per cent of the total paid-up equity share capital and 18.38 per cent of free reserves.

According to the company's exchange filing, its promoters are set to participate in the buyback, holding a current equity share of 53.61 per cent. The buyback price is set at Rs 2,800 per share, representing a 16.24 per cent premium over Thursday's closing price.
 

On Thursday, eClerx released its Q4 results, with its revenues growing by 10.5 per cent year on year (YoY) to Rs 766 crore against Rs 752 crore earned in Q4FY23. On a quarter-on-quarter basis, however, the revenues grew only by 1.8 per cent.

Profit after (PAT) dropped to Rs 130 crore in Q4FY23, down 1.5 per cent YoY and 5.8 per cent QoQ versus Rs 132 crore in Q4FY23 and Rs 138 crore in Q3FY24.

The company’s earnings before interest tax depreciation and amortisation also saw a dip of 4.1 per cent sequentially to Rs 218 crore in Q4FY24 as against Rs 228 crore in Q3FY24. 

The Ebitda margins slipped 169 basis points in the January-March quarter of FY24 to 23.4 per cent, while the net profit margin came in at 16.5 per cent. 

On a full-year basis, eClerx revenues grew by 10.5 per cent to Rs 2,925 crore in FY24 as against Rs 2,647 crore in FY23. PAT grew by 4.7 per cent to Rs 511 crore in FY24 versus Rs 488 crore in FY23.

The stock of the company has corrected 7.05 per cent in the last month, while the counter was down by almost 11 per cent year to date. 

At 11:05 AM; eClerx was trading 5.18 per cent lower at Rs 2278.60. In comparison, the S&P BSE Sensex rose 0.36 per cent. The company is presently trading at a price-to-earnings multiple of 30.27 times. 

eClerx Services is an Indian multinational company headquartered in Mumbai and Pune, specialising in IT consulting and outsourcing. The company offers business process management, automation, and analytics services to its clients.