Quess Corp (QUESS) Q4 17/18 earnings summary

Executive summary

• Completed 10 consecutive years of growth; FY18 revenue rose 43% YoY to ₹6,167 crore and EBITDA rose 49% to ₹354 crore.

• Headcount reached ~261,700, up 64% YoY; operations spanned 10 countries and served 1,700+ clients.

Financial highlights

• Consolidated revenue ₹6,167.26 crore, up 43% YoY; EBITDA ₹354.36 crore, up 49%, with margin at 5.75% vs 5.51%.

• Reported PAT ₹309.76 crore, up 154% YoY; PAT margin expanded to 5.02% from 2.82%; diluted EPS rose 127% to ₹21.82.

• Cash flow from operations was ₹109 crore; consolidated cash and cash equivalents were ₹566.11 crore at year-end.

• FY18 PAT included a ₹48.31 crore tax credit; the tax accounting included Section 80JJAA deductions relating to FY17.

Outlook and guidance

• Long-term aim: compound EBITDA at 20% p.a.; maintain debt/EBITDA around 2x while prioritizing institution-building over quarterly earnings.

• Focus on organic growth, margin- and return-accretive M&A, digitization, operating leverage and a shift toward higher-margin segments.

• OCF/EBITDA conversion was ~30% in recent years; expectation is for materially higher operating cash generation in the short to medium term, supporting acquisitions through internal cash.