Thread by @drprashantmish6

#quess Corp - my observations
• Market Cap: 5,432 Cr.
• Current Price: 370
• 52 weeks High / Low 639.05 / 165.00
• Book Value: 154.16
• Stock P/E: 44.14
• Dividend Yield: 0.00 %
• ROCE: 11.70 %
• ROE: 10.28 %

• SHP- Promotors holding 55.28( Constantly buying from market)
FIs 14%,DIs- around 16%,Rest with public
During market crash it went down from above 600 level to below 200

What It does –
It is engaged in offering end-to-end business solutions like general staffing, professional staffing, technology staffing, IT products and solutions, skill development, payroll, compliance management, integrated facility management and

industrial asset management services to corporate clients operating across sectors.
It is business services provider and largest private-sector employer.( fifth-largest manpower outsourcing company globally)with 3 operating segments.

1-Work force management

2-operating Asset management
3-Global technology solution across this ndustries
Quess has a team of over 334,000 employees with presence in India, North America, South East Asia and the Middle East across segments ,.

Quess serves over 2,000 clients worldwide.
Headcount 1364 in 2008 to 3.34 lac in 2020 ( See the growth )
Workforce Management
Operating Asset Management,
Global Technology Solutions across industries

Some Interesting Subsidiaries
Quess is having many subsidiaries but some subsidiaries you must be familiar also

1-Digicare ( Amazon invested 51 cr in it) After-sales services provider for handheld products like Mobile handsets, Tablets, Cameras and consumer electronics &

consumer durables products including Air conditioners, Washing machines,

Refrigerators, LED/LCD TVs etcetera.( Visit website of Digicare)
2- Monster ( job recruitment website )
3-Dependo - Doorstep courier packaging and delivery services ( see its website)

Debt position
In 2015 is debt was 224 cr and after that acquisition of many businesses and expansion debt was around 1147 cr in March 2020, (In FY 20 -Gross Debt increased by ₹ ~363cr to ₹ 1,147cr primarily due to ₹ ~410cr acquisitions done during the year

and a ₹ 100 cr increased precautionary working capital line drawn down in March 2020 due to COVID.)
.But in Q1 Gross debt reduced to ₹ 977cr from ₹ 1,147cr by ₹ 170cr,and company is working both directly and indirectly to reduce the debt.

Indirect measures to reduce debt-
Giving away the rental facility , Also the senior management employees will be living
in budget quarters, more and more paperwork is getting automated and digitalised
to save costs ,

For this whole year company will have something like Rs 60-70 crore
permanent reduction in indirect costs.
What i don’t like in the company-
Declining ROCE ( I am not good in financial but i think it is due to aggrasive acquisitions)

High competitive industry along with high attrition rates limit scope for margin expansion also .( already very thin margins)
-The company is also exposed to government receivables on account of its presence in the training and smart city project

(receivable of around 100 crore from the Smart City Ahmedabad Development Limited)

quess witnesses peak utilization of 85% of the company’s working capital limits regularly and it enters into tri-partite agreements with clients under which the associates remain on

QCL’s payrolls only as long as the services are availed by the client. However, payouts to its associates in the event of deferral/non-realization of collections from its clients could result in further stretch of the company’s working capital.

Now why i am optimistic on quess Corp
1-optimism’ on the hiring demand for the rest of the year as major cities such as New Delhi and Mumbai gradually open up with a decline in Covid-19 daily infections and clients prepare for the festive season ahead.

2- Government initiative of make in India to attract more manufacturing units and staff requirement ( Contract work force)
3-Apart from its rest of the businesses i am more optimistic about digicare( its like outsourced sales and service) and dependo.

If company reduces the debt further and no acquisition for next few years and less dependency on government projects then it may be very good for company, although it will remain a low margin business only .