Shares of eClerx Services rose 14 percent in Wednesday’s trading after the company announced that the board will consider a proposal for a bonus issuance. The BPO and KPO company announced that the board will meet on Tuesday, August 9, to discuss the company’s proposal to issue bonus shares.
“We hereby inform you that a meeting of the company’s board of directors will be held on Tuesday, August 9, 2022, including: 1. to approve and record the unaudited financial results (consolidated and standalone) of the company for the quarter ended June 30, 2022. 2. to consider the proposal for the issuance of bonus shares of the company,” announced eClerx Tuesday in an exchange request.
Bonus shares are fully paid-up additional shares issued by a company for free to its existing shareholders and issued in proportion to the number of shares held by the company’s shareholders.
The board of directors will also meet to approve and record the company’s unaudited financial results for the quarter ended June 30, 2022 (Q1FY23), eClerx Services said in an after-market filing Tuesday.
Following the development, shares of Eclerx Services zoomed to Rs 2,505.35 for about 14 hours on Wednesday, before giving up some gains to trade at Rs 2,356 at 10:25 AM. According to the data, shares of eClerx Services are up about 25 percent in the past month, while the shares have remained stable on a year-over-year basis.
eClerx is an Indian IT and consulting company providing business process management, automation and analytics services to a number of Fortune 2000 companies, including some of the world’s leading financial services, communications, retail, fashion, media and entertainment, manufacturing, travel and leisure time and technology companies.
Founded in 2000, eClerx employs more than 14,000 people in Australia, Canada, Germany, India, Italy, Netherlands, Philippines, Singapore, Thailand, UK and US.
The company had acquired Personiv, an outsourcing provider with more than 35 years of experience with offices in the US, India and the Philippines. The acquisition would benefit from synergies in digital and customer experience services. It would add approximately $32 million in annual revenue to eClerx, according to analysts at ICICI Securities.
Total revenue mix has slowly moved towards offshoring as the onshore revenue mix has fallen from 23 percent to 20 percent in the last four quarters, which is a tailwind for margin. Management does not expect a materially different mix in the future; led for a healthy EBITDA margin of 28-32 percent, the brokerage firm had said in its top picks for calendar year 2022.
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