Qualitas Ltd (QAL.AX): AI-led upgrade to margin guidance

Research evidence excerpt

Qualitas Ltd (QAL.AX): AI-led upgrade to margin guidance

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26 Jun 2026 06:34:20 ET │ 16 pages

Qualitas Ltd (QAL.AX)

AI-led upgrade to margin guidance

CITI'S TAKE

QAL hosted an AI webinar highlighting material benefits in its

documentation and decision-making processes. It raised its 3–5 year fund

management EBITDA margin guidance to >60% (vs. ~52% in FY25). In our Buy

view, the key financial lever is slower headcount growth, with AI helping Price (26 Jun 26 16:00) A$3.01

decouple cost growth from AUM expansion. We expect margin expansion to

be back-ended, with benefits emerging from FY28 onward. We broadly Target price A$4.20↑

maintain FY26/27E EPS but raise FY28E EPS by ~3%, factoring in modest from A$4.00

AI-driven efficiencies. While benefits are credible, we remain conservative Expected share price return 39.5%on timing and retention. TP raised to $4.20; maintain Buy rating

Expected dividend yield 4.0%

AI-led margin expansion expected — QAL has raised its 3–5 year fund management Expected total return 43.5%

EBITDA margin guidance to >60% (from >50% set in 2023), vs. 52.3% delivered in Market Cap A$907M

FY25. This sits above VA consensus (~52–53%), implying scope for upgrades, though

US$636Mmost gains are likely from FY28 onward.

Employee cost growth to moderate — Management flagged heavy documentation

processes where AI can boost productivity. The key impact should be slower

headcount growth, in our view. We expect core employee costs (~75% of opex) to Price Performance

grow at ~15% CAGR over FY26–28E vs. ~23% over FY21–26E. (RIC: QAL.AX, BB: QAL AU)

Earnings and TP revision — We keep FY26/27E earnings broadly unchanged but lift

FY28E earnings by 3% as we raise FY28E fund management margin to ~54% from

52% earlier. Our SOTP-based TP increases to $4.20.