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Multibagger stock: Emkay Global sees 20% upside in this IT share in long term

Multibagger stock: eClerx has been successful in acquiring digital capabilities, broadening its portfolio and integrating those capabilities with its business, culminating in good up sell and cross-sell opportunities. (MINT)Premium
Multibagger stock: eClerx has been successful in acquiring digital capabilities, broadening its portfolio and integrating those capabilities with its business, culminating in good up sell and cross-sell opportunities. (MINT)

  • Multibagger stock: As per the brokerage report, eClerx share price may go up to 2700 levels in 12 months, delivering near 20 per cent gain to its shareholders

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In stock market rebound post-second wave of Covid-19 selloff, a good number of shares have entered list of multibagger stocks in 2021. These multibagger stocks in India include eClerx Services shares. In year-to-date (YTD) time, eClerx share has surged from around 886 to 2250 per share levels, logging more than 150 per cent upside in this period. However, Emkay Global Financial Services sees more northward movement in this multibagger stock. As per its latest report, eClerx share price may go up to 2700 levels in 12 months, delivering near 20 per cent gain to its shareholders.

Highlighting the fundamentals that may support rally in this multibagger IT stock, the brokerage report said, "After five years of muted performance, the post-FY20 recovery in eClerx’s revenue growth appears sustainable, in our view. The recovery is driven by a healthy demand environment, lower roll-offs, stability at top clients and continued growth in emerging clients. We forecast 15 per cent revenue CAGR (organic near 11.4 per cent) over FY21-24E."

"EBITM rebounded strongly by 690bps/340bps YoY in FY21/H1FY22 after a 1560bps fall in FY16-20. EBITM growth was aided by revenue acceleration, WFH savings and other operating efficiencies. We expect WFH-related opex savings to partly normalize. We expect EBITM to moderate during FY22-24 but remain higher than the FY20 level," Emkay Global report said.

The brokerage report went on to add that eClerx has been successful in acquiring digital capabilities, broadening its portfolio and integrating those capabilities with its business, culminating in good up sell and cross-sell opportunities. The Personiv acquisition will add SMB sector clients and offer opportunities to cross-sell automation, analytics and other managed services to SMB clients.

On it suggestion to the positional investors in regard to this multibagger IT stock, Emkay Global Financial Services report said that investors can initiate momentum buy in the counter at current market price for one year target of 2700 apiece levels.

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

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