HomeNewsBusinessStocksBuy Quess Corp: target of Rs 850: Sharekhan
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Buy Quess Corp: target of Rs 850: Sharekhan

Sharekhan is bullish on Quess Corp has recommended buy rating on the stock with a target price of Rs 850 in its research report dated June 04, 2021.

Broker Research
June 08, 2021 / 18:38 IST
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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.
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.

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.

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Outlook

We recommend Buy with an unchanged PT of Rs. 850.

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