Accumulate eClerx Services - Emkay

eClerx Services Ltd.
Reco: ACCUMULATE
CMP: Rs 717
Target Price: Rs 800

Margins surprise positively

- Another consistent performance. Revenues at US$ 25.4 mn (+4.5% QoQ) met est, however mgns improved by ~640 bps QoQ to highest levels since March'09 driving profit beat

- Profits at Rs499.4 mn (+13% QoQ) beat est (Rs 452 mn) aided largely by better than expected margin show (gross margin improvement led by weak currency)

- Op metrics performance decent. Similar sequential growth across top 5/emerging accounts. DSO declines sharply to 52 days (V/s 76 days in Sep'11 qtr)

- FY12/13E earnings upped by 4%/2% to Rs 57.4/64.2 driven by currency resets to Rs 49.5/$ for FY13 (V/s Rs 48/$ earlier). Retain ACCUMULATE, TP unchanged at Rs 800.

Source : Equity Bulls

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