Name: Latest research reports of Quess Corp Ltd. authored by Motilal Oswal and published by - Trendlyne research reports.
Item: Quess Corp Ltd.
Rating: 3
Author: Motilal Oswal

Strength in organic business intact

Neutral: Quess Corp Ltd.

Recommendation Target

Motilal Oswal

26 October 2018 QUESS revenue grew 50% YoY to INR21b (in- line) in 2QFY19. The direction of several initiatives was encouraging in QUESS, the fructification of which would result in a positive the EBITDA margin to 6% by end-FY19 and to 8% in a few years, (ii) aim to convert 30-40% of EBITDA to operating cash, (iii) merger of subsidiaries into the parent, and (iv) a more selective approach on acquisitions with the intent of not adding additional verticals. We had downgraded QUESS when the impact of aggressive inorganic foray started to adversely impact the financial performance. However, we are encouraged by the steps the company is taking for margins improvement, cash conversion and focused acquisitions. While we remain encouraged by the long-term prospects of QUESS, we will reconsider our stance once we see start seeing an improvement on the above parameters.