Quess Corp's net profit grows 22 percent over last year

Bengaluru-headquartered staffing firm Quess Corp posted a consolidated profit of Rs 44.63 crore in the first quarter of fiscal year 2022 (FY 2022), 22.4 percent higher than last year's Rs 36.45 crore.

Quess Corp provides a host of technology-enabled staffing and managed outsourcing services. It has over 369,000 employees, serving over 3,000 clients across India, North America, APAC and the Middle East.

The latest quarter's profit was a strong recovery compared to the March quarter's loss of Rs 58.27 crore .

Quess reported consolidated revenue from operations of Rs 2,986.9 crore in Q1-FY 2022, 24 percent higher than Rs 2,409.4 crore in June last year, but down 0.6 percent from Rs 3,004.5 crore in March 2021.

“Our revenue has increased 24 percent Y-o-Y and stayed flat Q-o-Q, despite the second COVID wave during Q1 (FY 2022),” said Suraj Moraje, Managing Director and Group CEO of Quess Corp, in an exchange filing.

“Our ongoing investments in verticalised capabilities, technology and operating improvements will continue to power our momentum as we stay firmly focused on achieving an ROE (return on equity) of 20 percent,” Moraje added.

Its consolidated EBITDA (operating profit) of Rs 80.18 crore grew twice compared to Rs 39.92 crore in June last year. In the March quarter, the company reported a loss of Rs 30.55 crore, owing to provisioning.

Quess Corp's standalone profit of Rs 41.75 crore in Q1-FY2022, was nearly 26 times higher than the profit of just Rs 9.8 lakh in the June 2020 quarter.

In the March 2021 quarter, Quess Corp had recorded a standalone loss of Rs 105.13 crore. In its notes to accounts, the company said it had made provisions in the March quarter on account of delay in certain businesses.

In the analyst call that took place on August 6, the company mentioned that the B2G (Business-to-Government) segment is expected to have a setback, and it intends to close legacy government projects. On this, further provisioning would not be required, Quess informed.

The company has decided not to enter into any new government contracts in the near future, according to Sharekhan report dated June 4, 2021.

On a standalone basis, the company reported revenue from operations of Rs 2,125 crore, 25.3 percent higher than the previous year's Rs 1,696 crore. On a sequential basis, it was still 0.53 percent lower than Rs 2,113.7 crore in the March quarter.

The Sharekhan report had flagged that the second wave would affect Quess' businesses such as Digicare (its after-sales service business for handheld gadgets) due to the shutdown of stores, Excelus, which imparts skill development and training, and Monster India, Quess' job postings business.

Quess' workforce management segment, with Rs 2,005.15 crore contribution to consolidated revenue, grew over 23.9 percent from a year ago, and a fractional decline of 0.32 percent over the March quarter.

Quess' IT Staffing, under its workforce management segement, has a high demand currently evident from the fact that the company added 95 new clients in FY 2021. After hitting the bottom in the workforce management segment, the company expects margins to expand as the high-margin business returns to previous levels.

Its operating asset management segment reported 26.2 percent higher revenue at Rs 464.55 crore, compared to Rs 367.97 crore a year ago.

Quess' global technology solutions, which includes Monster India, witnessed an annual growth of 22.1 percent to Rs 517.23 crore, compared to Rs 423.35 crore last year.