Quess Delivers Solid FY17 Results

EBITDA up 47%, EBITDA Margin Improvement of 96 bps, Significant Uptick in Cash Generation

Bengaluru,17th May 2017: Quess Corp., India’s leading integrated business services provider announced today its financial results for the fourth quarter (Q4 FY17) and full-year (12M FY17) ended 31st March 2017. The key consolidated financials for FY17 are:

Particulars (in ? cr)     FY17     FY16 YoY (%)
Revenue    4,157.4    3,435.0 21.0%
EBITDA      222.8      151.1 47.5%
EBITDA Margin 5.4% 4.4% 96 bps
PAT      113.5         81.2 39.8%
PAT Margin 2.7% 2.4% 37 bps
Diluted EPS (in ?)   9.10   7.03 29.4%

FY17 – Highlights

  • Revenue grew 21.0% YoY to ?4,157 cr from ?3,435 cr in FY16.
  • EBITDA grew 47.5% YoY to ?223 cr compared to ?151 cr. EBITDA margin improved 96 bps YoY to 5.4% as against 4.4% in FY16.
  • PAT grew 39.8% YoY at ?113 cr from ?81 cr. Margin increased to 2.7% as against 2.4% in FY16, registering an expansion of 37 bps YoY.
  • Diluted EPS was higher by 29.4% YoY at ?9.10
  • Employee headcount as on March 31, 2017 was ~159,200 compared to ~122,500 employees in the corresponding quarter of last year, registering a growth of 30.0%.
  • Cash flow from operations increased to ? 71 crores in FY17 from negative ? 44 crores in FY16. The free cash flow (Cash flow from operations less capital expenditure) for FY17 stood at ? 33 crores, compared to negative ? 56 crores in FY16.
  • Quess announced 6 acquisitions and investments in FY17 with all the transactions closing happening in Q3 and Q4 (with exception to MIS acquisition, which is expected to close in Q2 FY18). The financial results of FY17 are not reflective of these acquisitions. It is expected that the financial consolidation of these acquisitions will commence in full form in FY18.
  • Issuance of Non-convertible Debentures – In January 2017, Quess raised ? 150 crores by issuing secured non-convertible debentures with a tenure of 5 years and an annual coupon of 8.25%, on a private placement basis. This was the first issuance of Non-convertible Debentures by Quess and was rated [ICRA]AA-(Stable). The proceeds were utilised for meeting long term working capital requirements and other general corporate purposes.

Segment Wise Performance

Particulars (in ? cr) FY17 FY16 YoY (%)
People & Services      
Revenue          2,345.4 1,949.8 20.3%
Results 108.9 72.4 50.4%
EBIT Margin 4.6% 3.7%  
       
Global Technology Solutions      
Revenue 1,183.0 921.1 28.4%
Results 83.4 60.5 37.9%
EBIT Margin 7.0% 6.6%  
       
Integrated Facility Management      
Revenue 404.6             371.9 8.8%
Results 20.3 17.2 18.2%
EBIT Margin 5.0% 4.6%  
       
Industrials      
Revenue             224.4             192.2 16.8%
Results               17.1               17.1 0.2%
EBIT Margin 7.6% 8.9%  


Commenting on the financial results, CMD & CEO Mr. Ajit Isaac
said that, “We are pleased with our industry leading financial results for FY17. On the back of strong topline growth, we expanded margins by 96 bps and significantly improved cash generation. Over a 5 year period, we have grown our company’s EBITDA by around 8x times. Our results reflect the strategy of management to build an institution and to significantly compound value for our shareholders over the long term. Capital allocation continues to be a key focus area and the successful completion of 6 acquisitions is a testament to that. We believe we are well positioned to leverage opportunities in a growing Indian market and to opportunistically make investments in international markets and related areas of Quess’ operations.”

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