Hold Quess Corp; target of Rs 820: Axis Direct

Axis Direct's research report onQuess Corp

Quess concluded FY17 with gross sales of Rs 41 bn, driven by strong organic growth of 21% YoY. EBITDA margin expanded 100 bps YoY to 5.7%. PAT at Rs 1.13 bn, up 40% YoY. Positive FCF of Rs 330 mn or 30% of PAT should allay investor concerns.

Retain est. and TP of Rs 820 (35x FY19 EPS); revise rating to HOLD. Over a 3 year horizon, we believe the stock still remains a compelling investment as numbers (FY19 onwards) do not factor in incremental upside from acquisitions which remain fundamental to business model.

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