Quess Corp - Creation Of Three Distinct Entities Likely To Be Value-Accretive: Motilal Oswal

Motilal Oswal Report

We attended the Quess Corp Ltd.'s investor meet. This was organized to provide more details about the plan to unlock for investors by splitting the company into three independent and standalone entities – Remain Co (Quess Corp, including the Workforce Management segment), Resulting Co 1 (Digitide, including BPM and Customer Experience) and Resulting Co 2 (Bluspring, including FMS, Industrial Services and Investments).

The management also formulated its targets for the three divisions, including improving return on equity, expanding international presence, and achieving market leadership in all segments. While we await more detailed data on the respective balance sheets, we see clear benefits for QUESS from this focused approach, which should help each division concentrate on its strengths and attract a suitable investor profile.

We continue to monitor the progress of the demerger process (to be completed in 12-15 months), and reiterate our Neutral rating on the stock due to the near-term industry headwinds.

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