Quess Corp: Q4 FY 21 Earnings – A strong exit to an unprecedented year

Mumbai: Quess Corp, India’s leading business services provider announced its financial results for the fourth quarter and year ended 31st March 2021 today.

Key highlights:

• H2’21top line growth and improved efficiencies drove strong operating results.
• Significant improvements in cash generation, with OCF of ₹587cr versus ₹234cr in FY’20.
• Net cash position of ₹99cr versus a net debt position of ₹355cr in FY’20.
• Announced the first-ever dividend at ₹7 per share, ~33% of FCF to be returned to shareholders over 3 years as per new dividend policy

The key consolidated financial parameters are:

Financial Highlights:

• The resurgence of growth in H2’21 made up for a decline in Q1’21; Revenue closed flat for the year over FY’20.
• Q4’21 EBITDA down 78% YoY. Includes provision of ₹ 119cr towards legacy government business. Lockdown-related losses in Q4’21 from Training and Skill Development and Food businesses amounted to ₹20cr versus Q4’20. Adjusted for this, EBITDA would be up 5%YoY.
• Reported PAT for FY’21at ₹74cr from ₹ -432cr; one-time charge on account of Goodwill DTL creation amounting to ₹ 52cr due to change in tax law.
• OCF grew 151% YoY to ₹ 587cr in FY’21 from ₹ 234cr in FY’20.
• OCF / Normalised Operating EBITDA at 131% in FY’21 against 44% in FY’20.
• Gross Debt reduced to ₹ 516cr from ₹ 1,147cr on the back of cash management, improved collections, and income tax refunds.

Other highlights:

Workforce Management: GS headcount almost back to pre-COVID levels of 240k in H2’21 against 203k in H1’21. Domestic IT Staffing saw EBITDA grow 54% in FY’21. Training and Skill Development break-even in Q4’21 although operating at 50% due to lockdown restrictions.

Global Technology Solutions: Emerged as largest EBITDA contributing platform in H2’21, revenue / FTE was 3.5% higher YoY in Q4’21. Pivot towards platform and non-voice business continues.

Operating Asset Management: Q4’21 revenues9% higher QoQ, driven by customer acquisitions. Industrials returning to growth, with Q4’21 revenues 11% higher QoQ.IFM and Security Services continue to be impacted by WFH in the IT/ITES & education sectors which contributed to 49% of pre-COVID revenues.

Emerging Business: Monster India showing green shoots with stronger sales, better product performance, and improved P&L.

Commenting on the results, MD & Group CEO Mr. Suraj Moraje said, “In a year that has been challenging indeed, Quess has been at the forefront of society’s war against COVID, even while emerging as an operationally fitter, financially stronger, and more technology-intense organization. On the back of this, it has been a pleasure to reward our shareholders with our first-ever dividend payout in line with our new dividend policy. We will continue to innovate our offerings and put our best foot forward while remaining committed to our twin goals of 20% ROE by FY23 and 20% Y-o-Y OCF CAGR.”