Buy Quess Corp; target of Rs 820: Motilal Oswal

An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

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26 Aug, 2025 12:21

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Quess Corp (QUESS)’s 4QFY21 results were operationally in line with our expectations, as revenue recovered to 4Q FY20 levels. This was led by recovery in all segments – Workforce Management (-1% YoY), Operating Asset Management (+9% YoY), and Global Technology Solutions (+1% YoY). Quess took one-time provisioning of INR1.2b in 4Q (830m in Trimax + 360m in skill development) on account of delay in receivables in government business. Excl. this, EBITDA margin was in line at 5.2%. Adj. PAT – excluding provisions and a one-time deferred tax liability charge on goodwill of INR520m (due to tax law changes) – was INR1.1b (v/s our estimate of INR779m). The beat on PAT was primarily led by tax reversal in 4Q.

Over the medium term, we expect QUESS to be a big beneficiary of the recent labor law reforms. Our TP of INR820 per share implies a multiple of 18x FY23E EPS. Reiterate Buy.

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