eClerx Services Limited Long term Bet

**eClerx Services Limited** is fundamentally strong but currently appears to be overvalued, with technical indicators showing mixed signals for short-term momentum. The target for the next six months ranges between ₹4,050 and ₹4,500, reflecting moderate upside potential, though valuations and profit booking may cause volatility.[1][2][3]

## Fundamental Analysis

- **Revenue & Profit**: Trailing twelve months (TTM) revenue is ₹3,518 crore, with net profit at ₹571 crore. The company boasts healthy gross margins (~36%) and a solid net profit margin (~16%).
- **Valuation**: P/E ratio is 36.16 (TTM), making it expensive compared to sector peers; P/B stands at 9.21 and P/S at 5.87. The stock trades at a 51% premium to estimated intrinsic value (~₹2,860); fair value models cluster between ₹2,098 and ₹2,872.
- **Dividend & Shareholding**: Dividend payout is modest (₹1.00 per share, upcoming October 2025). Promoters hold the majority stake (53.8%), with high FII and DII interest.
- **Sector & Business Model**: eClerx serves top global sectors like finance, telecom, retail, offering advanced analytics and business process management. Expansion in US/Europe and digital solutions provide growth levers.

## Technical Analysis

- **Trend and Momentum**: Recent charts indicate a trading range bound near ₹4,300–4,400, with recent resistance near ₹4,588. Risk/reward ratios for short-term trades are favorable, but overall technical indicators lean towards 'Strong Sell'—a cautionary sign suggesting limited momentum in the near term.
- **Market Moves**: The stock fell 2.5% on September 5, but recovered in the following days, with volume profile indicating decent buyer interest below ₹4,300.
- **Support and Resistance**: Key support seen near ₹4,220–4,250; resistance is likely at ₹4,588. A break above ₹4,450 could open higher targets, while losses below ₹4,220 may trigger downside towards ₹4,050.

## Six-Month Target

| Source | Target (INR) | Time Frame |
|--------------|-------------------|--------------|
| TradingView | 4,053–4,500 | 6 months |
| Analyst Consensus | ~4,200–4,450 | 6 months |
| Technical Pivot | ~4,360 (current), with breakout potential to 4,588 | 6 months |

Analysts expect eClerx to trade between ₹4,050 and ₹4,500 over the next six months, with potential upside if business momentum and sector conditions remain favorable.

## Investment Outlook

- **Positives**: Strong fundamental growth, diversified business model, and consistent margins support long-term investment.
- **Risks**: High valuation premium, sector rotation, and overbought technicals may lead to periodic corrections.
- **Verdict**: eClerx Services is fundamentally robust but requires cautious approach for fresh entries given its premium pricing; ideal for accumulation on dips with a target up to ₹4,500 if sector tailwinds persist.

Here is a detailed table of **ROCE, ROE, CAGR, fair value, resistance, support, and 6-month target** for eClerx Services Limited, compiled from current data and recent technical levels:[1][2][3][4][5][6][7][8]

| Metric | Value/Level | Source/Remarks |
|-----------------|---------------------------|-------------------------------------------------------|
| **ROCE** | 33.1% | Strong efficiency; sector-leading |
| **ROE** | 23.4%-24.3% | Latest 2025 values; robust |
| **CAGR (5Y)** | ~57% | 5-year annual return |
| **Fair Value** | ₹2,860 | Median intrinsic valuation |
| **1-Year High** | ₹4,640 | Technical resistance zone |
| **1-Year Low** | ₹2,168 | Technical support zone |
| **Current Price** | ₹4,338 | As of Sept 2025 |
| **Resistance** | ₹4,450–₹4,640 | Next upside hurdles |
| **Support** | ₹4,220–₹4,250 | Immediate downside guards |
| **Target (6M)** | ₹4,050–₹4,500 | Analyst/technical forecast |

All numbers are based on consolidated, trailing twelve months (TTM), annual returns, and latest analyst consensus as of September 2025.

- **ROCE** and **ROE** reflect strong operational and equity efficiency, supporting higher valuations.
- **CAGR** (~57%) shows powerful historical wealth creation, though fair value (₹2,860) warns of premium pricing.
- Support/resistance/target levels reflect current chart analysis and expert views for next six months.