Kotak Securities's research report onQuess Corp
The company has booked a non-operating accounting charge of ~Rs.160 mn (prior-period) in Q1FY19 resulting in lower PAT and lower margins. However, management is optimistic that in 9MFY19 the margins will improve. It has already started a business transformation program encapsulating zero based budgeting, service excellence and digitization of key business processes to further enhance margins.
OutlookWe now expect Quess to report an EPS of Rs.28.7 in FY19E and an EPS of Rs. 32.6 in FY20E supported by both recent acquisitions done by the company and organic growth. We maintain BUY rating on Quess with a revised target price of Rs.1302/share (earlier Rs. 1320/share), valuing the company at a P/E multiple of 40x on FY20E.
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