eClerx Services Limited's (NSE:ECLERX): Top Key Executive Priyadarshan Mundhra is the most bullish insider, and their stock value gained 5.3% last week

Key Insights

• Significant insider control over eClerx Services implies vested interests in company growth
• The top 2 shareholders own 54% of the company
• Institutions own 31% of eClerx Services

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To get a sense of who is truly in control of eClerx Services Limited (NSE:ECLERX), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 55% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 5.3% gain.

Let's delve deeper into each type of owner of eClerx Services, beginning with the chart below.

See our latest analysis for eClerx Services

What Does The Institutional Ownership Tell Us About eClerx Services?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that eClerx Services does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of eClerx Services, (below). Of course, keep in mind that there are other factors to consider, too.

eClerx Services is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In eClerx Services' case, its Top Key Executive, Priyadarshan Mundhra, is the largest shareholder, holding 27% of shares outstanding. Anjan Malik is the second largest shareholder owning 27% of common stock, and HDFC Asset Management Company Limited holds about 9.8% of the company stock. Interestingly, the second-largest shareholder, Anjan Malik is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of eClerx Services

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of eClerx Services Limited. This gives them effective control of the company. Given it has a market cap of ₹172b, that means insiders have a whopping ₹94b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over eClerx Services. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.