We assign a fundamental rating of 7 out of 10 to EXLS. EXLS was compared to 88 industry peers in the IT Services industry. Both the health and profitability get an excellent rating, making EXLS a very profitable company, without any liquidiy or solvency issues. EXLS is not priced too expensively while it is growing strongly. Keep and eye on this one! This makes EXLS very considerable for growth and quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

EXLS had positive earnings in the past year.
In the past year EXLS had a positive cash flow from operations.
EXLS had positive earnings in each of the past 5 years.
In the past 5 years EXLS always reported a positive cash flow from operatings.

1.2 Ratios

EXLS has a Return On Assets of 13.93%. This is amongst the best in the industry. EXLS outperforms 92.05% of its industry peers.
EXLS has a better Return On Equity (25.35%) than 87.50% of its industry peers.
EXLS has a Return On Invested Capital of 16.51%. This is amongst the best in the industry. EXLS outperforms 90.91% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for EXLS is significantly below the industry average of 29.07%.
The 3 year average ROIC (15.15%) for EXLS is below the current ROIC(16.51%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	13.93%
ROE	25.35%
ROIC	16.51%

ROA(3y)11.89%

ROA(5y)10.36%

ROE(3y)20.31%

ROE(5y)17.99%

ROIC(3y)15.15%

ROIC(5y)13.79%

1.3 Margins

With an excellent Profit Margin value of 11.91%, EXLS belongs to the best of the industry, outperforming 82.95% of the companies in the same industry.
EXLS's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 15.15%, EXLS belongs to the top of the industry, outperforming 80.68% of the companies in the same industry.
In the last couple of years the Operating Margin of EXLS has grown nicely.
EXLS has a Gross Margin of 38.24%. This is in the better half of the industry: EXLS outperforms 60.23% of its industry peers.
EXLS's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	15.15%
PM (TTM)	11.91%
GM	38.24%

OM growth 3Y0.91%

OM growth 5Y10.78%

PM growth 3Y1.78%

PM growth 5Y9.57%

GM growth 3Y-0.74%

GM growth 5Y2.1%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

EXLS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, EXLS has less shares outstanding
EXLS has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, EXLS has a worse debt to assets ratio.

2.2 Solvency

EXLS has an Altman-Z score of 8.05. This indicates that EXLS is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 8.05, EXLS belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
The Debt to FCF ratio of EXLS is 1.24, which is an excellent value as it means it would take EXLS, only 1.24 years of fcf income to pay off all of its debts.
EXLS has a better Debt to FCF ratio (1.24) than 78.41% of its industry peers.
A Debt/Equity ratio of 0.37 indicates that EXLS is not too dependend on debt financing.
EXLS has a Debt to Equity ratio (0.37) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0.37
Debt/FCF	1.24
Altman-Z	8.05

ROIC/WACC1.78

WACC9.25%

2.3 Liquidity

EXLS has a Current Ratio of 2.91. This indicates that EXLS is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of EXLS (2.91) is better than 77.27% of its industry peers.
EXLS has a Quick Ratio of 2.91. This indicates that EXLS is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of EXLS (2.91) is better than 77.27% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.91
Quick Ratio	2.91

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 20.38% over the past year.
Measured over the past years, EXLS shows a very strong growth in Earnings Per Share. The EPS has been growing by 21.93% on average per year.
The Revenue has grown by 14.43% in the past year. This is quite good.
Measured over the past years, EXLS shows a quite strong growth in Revenue. The Revenue has been growing by 13.15% on average per year.

EPS 1Y (TTM)20.38%

EPS 3Y19.78%

EPS 5Y21.93%

EPS Q2Q%9.09%

Revenue 1Y (TTM)14.43%

Revenue growth 3Y17.88%

Revenue growth 5Y13.15%

Sales Q2Q%12.18%

3.2 Future

The Earnings Per Share is expected to grow by 15.23% on average over the next years. This is quite good.
Based on estimates for the next years, EXLS will show a quite strong growth in Revenue. The Revenue will grow by 11.93% on average per year.

EPS Next Y17.75%

EPS Next 2Y16.03%

EPS Next 3Y15.23%

EPS Next 5YN/A

Revenue Next Year13.37%

Revenue Next 2Y12.36%

Revenue Next 3Y11.93%

Revenue Next 5YN/A

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 20.71, the valuation of EXLS can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of EXLS indicates a somewhat cheap valuation: EXLS is cheaper than 63.64% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of EXLS to the average of the S&P500 Index (28.30), we can say EXLS is valued slightly cheaper.
With a Price/Forward Earnings ratio of 17.52, EXLS is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EXLS indicates a somewhat cheap valuation: EXLS is cheaper than 64.77% of the companies listed in the same industry.
EXLS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	20.71
Fwd PE	17.52

4.2 Price Multiples

65.91% of the companies in the same industry are more expensive than EXLS, based on the Enterprise Value to EBITDA ratio.
EXLS's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. EXLS is cheaper than 61.36% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	21.66
EV/EBITDA	16.01

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
EXLS has an outstanding profitability rating, which may justify a higher PE ratio.
EXLS's earnings are expected to grow with 15.23% in the coming years. This may justify a more expensive valuation.