Buy Quess Corp; target of Rs 1072: Kotak Securities

Kotak Securities' research report on Quess Corp

Quess corp management alluded its focus on execution and balance sheet management to boost its long term earnings growth. Improvement in operating margin will be supported by better revenue mix, improvement in operations of DIGIMAX solutions, turnaround of Monster and other efficiency improvement. With strong focus on balance sheet management and execution in each of businesses yielded tangible results in H1FY19 with superior working capital management leading to an achievement of 34% OCF/EBITDA conversion.

Outlook

We maintain BUY rating on Quess with a revised target price of Rs.1072/share (earlier Rs. 1302/share), valuing the company at a 35x P/E multiple (earlier 40x). In India, every month ~1 million people are entering the workforce, generating sustainable employment becomes an imperative which opens huge growth opportunities for Quess.