Stock

The inside story of EXL Service Holdings Inc.

 

Financial strength:

Sector: Technology         Index: RUT          Market cap: 5.10B

Income: 176.12M             Sales: 1.59B        P/E: 29.62

Debt/Equity: 0.32

 

Business Description:

The company was founded by Vikram Talwar and Rohit Kapoor in April 1999 and is headquartered in New York, NY. It is a business process management company that provides digital operations and analytical services to clients driving enterprise-scale business transformation initiatives that leverage the company’s deep expertise in analytics, AI, ML, and cloud. The company offers business process outsourcing and automation services, and data-driven insights to customers in multiple industries.

The company operates through four segments based on the products and services offered and markets served: Insurance, Healthcare, Emerging, and Analytics. The vast majority of the company’s revenue is earned in the United States, and more than half of its revenue comes from the Analytics segment.

Historical Performance:

 

Financial Highlights: Third Quarter 2023:

• Revenue for the quarter ended September 30, 2023 increased to $411.0 million compared to $361.4 million for the third quarter of 2022, an increase of 13.7% on a reported basis and 13.2% on a constant currency basis. Revenue increased by 1.5% sequentially on a reported basis and constant currency basis, from the second quarter of 2023.

 

• Operating income margin for the quarter ended September 30, 2023 was 14.7%, compared to 13.9% for the third quarter of 2022 and 16.0% for the second quarter of 2023. Adjusted operating income margin for the quarter ended September 30, 2023 was 20.0%, compared to 18.5% for the third quarter of 2022 and 20.0% for the second quarter of 2023.

 

• Diluted earnings per share for the quarter ended September 30, 2023 was $0.26, compared to $0.23 for the third quarter of 2022 and $0.29 for the second quarter of 2023. Adjusted diluted earnings per share for the quarter ended September 30, 2023 was $0.37, compared to $0.31 for the third quarter of 2022 and $0.36 for the second quarter of 2023.

 

Business Highlights Third Quarter 2023:

• Won 16 new clients in the third quarter of 2023, with five in digital operations and solutions business and 11 in data analytics.
• Established a headquarters for international business in Dublin and formed new centres of excellence to develop best practices and improve efficiencies.
• Recognized as a Leader and Star Performer in Everest Group’s Property and Casualty (P&C) Insurance BPS PEAK Matrix® Assessment 2023.
• Recognized as a Leader in Everest Group’s Clinical and Care Management Operations – Services PEAK Matrix® Assessment 2023.

 

TECHNICAL OUTLOOK:

Recommendation: Buy

CMP: 30.92

Stop Loss: 24.00

Target: 53.00 – 55.00

Timeframe: 4 to 5 months

WEEKLY CHART:

Technically, stock is trading in higher top higher bottom formation on weekly timeframe since 2020 and after taking support on up-ward sloping channel formation (drawn in red line) in the month of Oct 2023, it has started showing positive build-up in price action.

If prices manage to sustain above 34.00 level on the higher side, then it will see further strong positive momentum.

It is suggested to create long position once its start’s sustaining above 34.00 level on higher side.

Stop loss will be placed at immediate support at 24.00 level and one can expect target of 53.00 – 55.00 levels on the higher side within the timeframe of 4 to 5 months.

 

Conclusion:

EXLS’s Q3 2023 earnings report shows a strong performance with significant growth in revenue and adjusted diluted EPS. The company’s robust performance and increased guidance for the full year 2023 reflect its strong momentum and position in the market.