eClerx Services Stock to Watch as Buybacks, Dividends, Q4 Results are Released

by | May 17, 2024 | 0 comments

Share Buyback of EClerx Services: The firm’s board has approved a scheme to buy back shares up to the amount of 13,75,000 fully paid up equity shares having a face value of INR 10 each for cash not exceeding INR 385 crore.

The announcement by Mumbai-based IT Company on share buyback and final dividend for FY25 and its March quarter results shall make eClerx services ltd shares noteworthy on Friday morning. It is a critical issue that investors must comprehend since it has significant implications on the market.

eClerx Services Q4 Results

Lower Net Profit

March quarter saw eClerx Services Ltd posting consolidated net profit of Rs. 129.89 crore, which was a marginal fall from Rs. 132.35 crore for the quarter ended March last year. The company has demonstrated some strength even after this minor drawback.

Increase in Sales Revenue

On the other hand, sales revenue increased to INR 76653 mn from INR 69310 mn YoY basis for the quarter under review compared with that in the same period of previous fiscal year (YoY). This shows that there is high demand for their services and good operational performance at eClerx.

eClerx Services Share Buyback

Approval and Details about The Buyback Proposal

The Board of Directors have given their nod to repurchase not more than 1,375,000 fully paid-up equity shares aggregating Rs 1 Crore which means every share will be bought back at a price not exceeding Rs.28 per share; excluding expenses related with procurement such as brokerage costs, fees or charges or turnover tax or taxes like securities transaction tax and goods and services tax (GST) or tax on distributed income by way of buyback.

Meaning of the Buyback

Based on Standalone and Consolidated Audited Financial Statements of eClerx as on March 31, 2024, the total equity share capital paid up and free reserves represents 24.98% and 18.38% of the aggregate of both respectively. The large scale buyback indicates that the company is buoyant about its financial soundness as well as future growth prospects.

Price and Method Used to Buy Back

The price at which shares shall be repurchased for INR 2800 per share. Record date will be declared shortly by the firm for this trade offer through tender route. Moreover, the buyback would be made in accordance with SEBI (Buy-Back of Securities) Regulations on a proportionate basis. Notably, it has been intimated that this move includes reservation of 15 percent out of total proposed buyback size towards small shareholders, thus giving them an opportunity to participate in this financial strategy.

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eClerx Services Final Dividend

Announcement regarding Dividend

eClerx Services has recommended a final dividend of Rs1 per share (10%) for FYE Mar’24, subject to approval by the shareholders at AGM.

Particulars & Distribution

For FY ended March 31, 2024 dates will be informed to Stock Exchange(s) about date of AGM & Book Closure dates which are used for entitlement purpose & dividend’s payment will starts after their ratification from members.

Effect on eClerx Services Share Price

Market Reaction to Buyback and Dividend

eClerx Services stock market is expected to be influenced positively by the announcement of share buyback and final dividend. This clearly demonstrates how much eClerx values its investors and believes in its future financial performance.

Long-Term Outlook

Buybacks and dividends are perceived as positive signs by most investors. After repurchasing shares through a buyback program, the number of remaining outstanding shares may decrease, thus increasing their value. In addition, shareholders receive direct benefits from payment of dividends. Such actions will boost confidence among investors and consequently contribute to an increase in eClerx Services’ stock price.

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Conclusion

The recent news about eClerx Services Ltd’s share buyback, final dividend as well as Q4 results is highly important for the company and its shareholders alike. The fact that both the above moves have been made is indicative of good health in terms of their finances on one hand and rewarding the parties responsible for contributing towards its success on another. As these initiatives happen over time, you can count on eClerx Services stock being watched closely by the market.

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