EXLS

EXLS is a rare combination of growth, quality and a reasonable price. Revenue has nearly doubled from $1.12B (FY21) to $2.09B (FY25) — a ~17% CAGR — while net income compounded faster ($115M → $251M, ~22% CAGR), proving operating leverage. FY25 alone delivered +13.6% revenue, +19.0% operating income and +26.6% net income, with operating margin expanding to 15.0% and ROE hitting a best-in-class 27.5%. Cash generation is excellent: $351M of operating cash flow (+30.6% YoY) vs. $251M net income (1.4x conversion), funding $328M of buybacks that shrunk the share count 3.6%. Net debt is trivial (~$153M against $351M OCF), so the balance sheet supports continued repurchases or tuck-ins without strain.

Valuation does not appear to price this in. At $26.34, P/E is 17.1x trailing diluted EPS of $1.54 and P/S is 2.0x — a PEG well below 1 against ~25% earnings growth. A 20–22x multiple on FY25 EPS (modest for a 27% ROE business with ongoing buyback support) implies $31–34, hence a $32 target. Even without multiple expansion, the buyback alone (~8% of market cap repurchased in FY25) is a structural EPS tailwind.