Emkay Global Financial has issued a buy rating on eClerx Services with a target price of ₹1,800 in its research report dated May 15, 2026. According to the report, the brokerage maintains its positive outlook on the company despite softer Q4 operating performance. The recommendation is based on the company's strategic positioning in automation and analytics, which are expected to drive future growth.
eClerx posted soft operating performance in Q4, with revenue growing 0.5% QoQ in constant currency, which fell short of expectations. As reported by Emkay Global, EBITDA margin declined by approximately 40 basis points QoQ to 21.1%, primarily due to higher hiring and travel costs, though this was partially offset by lower general and administrative expenses and sales and distribution costs.
The company demonstrated strong momentum in new deal Annual Contract Value (ACV) at USD 46.1 million in Q4, with ACV growing approximately 24% year-on-year on a trailing twelve-month basis. According to Emkay Global's report, automation and analytics have scaled to approximately USD 90 million and are expected to outpace overall company growth, emerging as a key structural growth driver. eClerx secured its first large-scale agentic AI win in Q4, with deployment scheduled to begin in Q1FY27.
Management expressed optimism about future performance, with aspirations for year-on-year growth in bookings for FY27. As reported by Emkay Global, the company expects Q1FY27 to be sequentially better than Q4FY26 and aims to deliver top-quartile revenue growth in FY27 supported by order booking and pipeline strength. The management has retained its 24-28% EBITDA margin guidance range for FY27, factoring in investments in technology, AI, and sales initiatives.
Emkay Global has tweaked FY27E and FY28E EPS estimates by approximately 1% to factor in Q4 performance. According to the report, the brokerage maintains its buy rating and target price of ₹1,800, valuing the stock at 18x March 2028 estimated earnings per share. The recommendation reflects confidence in the company's strategic positioning in AI and automation services despite near-term margin pressures.
