India’s largest staffing firm Quess Corp to complete demerger within a year

BENGALURU, INDIA — Quess Corp, India’s biggest third-party supplier of private-sector staffing needs, is on track to complete its demerger process within a year. 

Chairman Ajit Isaac revealed that the company plans to file an application with the National Company Law Tribunal (NCLT) soon, marking a significant step in the restructuring announced earlier this year.

“Re-rating of its businesses is one of the reasons for the demerger due to a simplified structure, as it allows each of these companies to focus better by providing greater capital allocation flexibility, improved market position, and other benefits,” Isaac told ET.

Quess Corp’s demerger process and timeline

The demerger aims to create a simplified corporate structure by separating Quess Corp into three independent entities. 

• Quess Corp Ltd: Focusing on workforce management
• Digitide Solutions Ltd: Handling business process management (BPM), insurtech, and human resource outsourcing (HRO)
• Bluspring Enterprises Ltd: Overseeing facility management, industrial services, and investments

This move is expected to provide enhanced clarity and management focus to accelerate growth across its diverse business segments.

Financial and market impact of Quess Corp

Over the past year, Quess Corp has experienced a significant stock rally of 44%, outperforming the Sensex’s 22% gain. 

The company trades at 30 times its trailing twelve months’ earnings, showing a strong financial performance with a 4% operating profit margin in FY24. In comparison, its listed peer TeamLease trades at 44 times earnings with a 1% profit margin.

Future plans of Quess Corp

Looking ahead, Isaac is optimistic about the growth prospects, especially with India poised to be the fastest-growing major economy. 

“Digitide Solutions will operate in the business process management and related sectors targets to achieve a revenue milestone of $1 billion, a significant increase from its current revenues of over $320 million,” he highlighted.

Since acquiring a majority stake in AllSec Technologies in April 2019 at ₹320 (US$3.83) per share, Quess Corp’s stock has surged by 260%, now trading at ₹1,165 (US$14). This move is part of a broader strategy to enhance their market position across various sectors in India.