Buy Quess Corp; target of Rs 800: Emkay Global Financial

Emkay Global Financial's research report on Quess Corp

Quess Corp’s Q3FY25 operating performance was broadly in line with our estimates. WFM saw some softness on account of weakness in select verticals in General Staffing (GS), along with hiring pullback post-Diwali, modest demand in IT Services (cushioned by GCC hiring), and weakness in Singapore hiring. Foundit performance also slipped, impacted by unfavorable seasonality, headwinds in the IT sector, and leadership transition. OAM and GTS registered a steady performance. EBITDAM was impacted by higher investments toward driving higher growth, festive-related bonus payouts, and demand weakness. Slowdown in BFSI and reduction in consumer sentiment are expected to sustain in the near term, though this should be temporary. The demerger remains on track, and should drive value unlocking and re-rating, in our view.

Outlook

We trim FY25-27E EBITDA by 1-6%, factoring in the Q3 performance, muted near-term outlook, and the slightly slower margin trajectory. We retain BUY on Quess Corp, while trimming our SOTP-based TP to Rs800 from Rs850 (5.9% cut).