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E-CLERX -Key takeaways
�� eClerx would continue its focus on its two key verticals – Sales and marketing for retail
companies and mid and back office support for banking and capital market clients as the
company sees significant growth opportunities in both the verticals.
�� The company has processes in place (many touch points at client and company side) to
prevent any adverse impact of the high client concentration (~85% from top 5 clients).
Company is making concentrated efforts in reducing client concentration. Most of the
client contracts are of 2-3 year duration with more than 80% deal renewal rate.
�� As per the company, they were reactive to acquisitions in the past few years but now they
are proactively looking for acquisitions of two kinds – (1) ones that would add a third
service line to the company; potential target’s revenue size could be in the region of
US$20-40 mn, and (2) tuck-in acquisitions filling in gaps in the service offering portfolio
within the current two broad areas that the company works in; such an acquisition would
be smaller in size.
�� The company has passed a board resolution to raise funds for any potential acquisition.
The company accepts that acquisitions could be margin dilutive in nature (difficult to find
targets with margins of 30-35%) but acquisitions could help build new business or
accelerate the growth trajectory.
�� Attrition has increased for eClerx (in line with the industry) over the past three quarters –
but this attrition is mostly at the junior level. Attrition at the managerial levels is less than
15% - comfortable for the company. The company hires graduates (any stream) with an
experience of 12-18 months with a salary of Rs2.4 lac per annum.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
E-CLERX -Key takeaways
�� eClerx would continue its focus on its two key verticals – Sales and marketing for retail
companies and mid and back office support for banking and capital market clients as the
company sees significant growth opportunities in both the verticals.
�� The company has processes in place (many touch points at client and company side) to
prevent any adverse impact of the high client concentration (~85% from top 5 clients).
Company is making concentrated efforts in reducing client concentration. Most of the
client contracts are of 2-3 year duration with more than 80% deal renewal rate.
�� As per the company, they were reactive to acquisitions in the past few years but now they
are proactively looking for acquisitions of two kinds – (1) ones that would add a third
service line to the company; potential target’s revenue size could be in the region of
US$20-40 mn, and (2) tuck-in acquisitions filling in gaps in the service offering portfolio
within the current two broad areas that the company works in; such an acquisition would
be smaller in size.
�� The company has passed a board resolution to raise funds for any potential acquisition.
The company accepts that acquisitions could be margin dilutive in nature (difficult to find
targets with margins of 30-35%) but acquisitions could help build new business or
accelerate the growth trajectory.
�� Attrition has increased for eClerx (in line with the industry) over the past three quarters –
but this attrition is mostly at the junior level. Attrition at the managerial levels is less than
15% - comfortable for the company. The company hires graduates (any stream) with an
experience of 12-18 months with a salary of Rs2.4 lac per annum.
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