Business services provider Quess Corp. expects higher growth in the coming quarters on the back of manufacturing and IT sectors.
Quess Corp. reported its highest ever revenues, Ebitda and profit after tax in the quarter ended December, Chief Executive Officer Guruprasad Srinivasan told BloombergQuint's Niraj Shah in an interview. He attributed the numbers to a seasonal spike in business and lesser impact of the third wave of Covid-19.
In the coming quarters, the company stands to gain from multiple long-term themes, Srinivasan said. While its general staffing and training businesses could benefit from formalisation, operating asset management and tech services could gain from clients resuming operations, he said. A long-term benefit could also emerge from companies transforming fixed costs into variable costs, he said, referring to clients resorting to outsourcing and other steps to improve efficiency.
Srinivasan expects margin to improve but not immediately as it scales down some elements of the workforce business.
Recent efforts by the company's management to streamline capital allocation is being viewed as a step in the right direction by brokerages including Phillip Capital.
According to Srinivasan, Quess Corp.'s capital allocation policy is “clear and defined”. “From the total profits we generate, one-third is going towards dividend, one-third is going towards acquisition and one-third towards internal organic growth," he said. "If we do acquisitions, we spend that (capital); otherwise, we see how we can return it to the shareholder.”
While the recent exit of the former CEO Suraj Moraje was viewed negatively, analysts see Srinivasan's appointment as a positive move as he has been associated with the company since inception and understands the business.
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