Sharekhan has given Buy recommendation for Quess Corp with a target price of Rs. 850 in its research report issued on Jun 04, 2021
Sharekhan’s research report on Quess Corp
Quess Corp’s performance improved q-o-q with revenues and EBIDTA (excluding one-offs) growing by 7% and 4%; general staffing and industrial businesses grew by 11% each. OCF-to-EBIDTA stood at 93% in Q4FY21 versus 33% in Q4FY20. Company is net cash positive at Rs. 99 crore in FY2021 vs Net Debt of Rs. 355 crore in FY2020. The management has maintained its target of achieving 20% RoE through double-digit organic revenue growth in FY2023, targets to achieve OCF to EBIDTA ratio of ~70% and reduce gross debt to Rs. 100 crore in the coming quarters. Cross selling to existing clients, adding new clients in each business vertical and improve profitability of each remains key earning growth drivers in the near term.
We recommend Buy with an unchanged PT of Rs. 850.