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Motilal Oswal Report
Quess Corp Ltd. delivered an 8.8% YoY growth in revenue, in line with our estimate. The headcount addition was strong at ~30000 net. The Ebitda margin at 3.3% (-30 bp QoQ) was in line with our estimate too. This was due to a margin contraction in global technology solutions (-122 bp QoQ) and operating asset management (-64 bp QoQ) businesses.
Adjusted profit after tax increased 117% YoY to Rs 1,038 million, above our estimate of Rs 851 million, largely due to lower depreciation and ETR (5.8% versus 10% estimated).
Management indicated good demand, especially in its workforce management business; manufacturing and banking, financial services, and insurance had a good quarter too.
IT staffing saw a positive trend after a few quarters of decline. Also, the mandate level has gone up to 1,500 in Q1 from 1,100, which indicates an improving traction. We believe H2 will be better for IT staffing than H1.
While growth in WFM and OAM was tepid due to seasonality, Quess Corp hired additional 30000 individuals in Q1, which provides good visibility for near-term growth. We estimate a revenue compound annual growth rate of 12% over FY24-26.
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