Multibagger stock: Emkay Global sees this IT stock up 20% over the long term

Highlighting the fundamentals that supported the rally in this multibagger IT stock, the brokerage report said, “After five years of muted performance, the post-fiscal recovery in revenue growth of eClerx, appears to be sustainable in our view.” The recovery is driven by a healthy demand environment, low roll-off, stability in top clients and continued growth in emerging clients. We anticipate a 15 per cent revenue CAGR (organic close to 11.4 per cent) in FY 2011-24E Huh.”

“EBIT made a strong return of 690 bps/ 340 bps in FY 2011/H1FY22 after a decline of 1560 bps in FY 2016-20. Growth of EBIT was aided by revenue acceleration, WFH savings and other operational efficiencies. We from WFH Related OPEX savings are expected to partially normalize. We expect EBITM to moderate during FY22-24 but remain above FY20 levels,” the Emkay Global report said.

The brokerage report further stated that eClerx has been successful in acquiring digital capabilities, broadening its portfolio and integrating those capabilities with its business, resulting in great sell and cross-sell opportunities. The Persive acquisition will connect customers in the SMB segment and provide opportunities for SMB customers to cross-sell automation, analytics and other managed services.

On a suggestion to positional investors regarding this multibagger IT stock, investors can buy momentum in the counter at the current market price for the one year target, said Emkay Global Financial Services report. 2700 each level.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.