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Quess Corp to move away from milestone-led government projects

The company clocked close to Rs 200 crore a year as revenue from these projects during pre-COVID times. Milest0ne projects are those under which companies are required to meet a set target of training/skilling in a certain number of years as decided by the govt.

June 04, 2021 / 12:11 PM IST
 
 
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Technology and business services provider Quess Corp will move away from milestone-led projects in the areas of training and skill development.

In an interaction, post the March quarter (Q4) results, Suraj Moraje, MD & Group CEO, Quess Corp, said that the company will stay away from projects that have set milestones.

“If it is a milestone-based project business, we have decided to avoid it. There is a lot of hesitancy to sign off from these projects even if you have done good work. The cash flow profile is just not what we want it to be," he told Moneycontrol.

Quess Corp generated close to Rs 200 crore a year as revenue from this business during pre-COVID-19 times.

The government sets up milestone projects, under which companies are required to meet a set target of training/skilling in a certain number of years.

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For Q4, the total revenue from operations stood at Rs 3,005 crore, against Rs 2,995 crore in the year-ago period.

During the fourth quarter, the company posted a net loss of Rs 58 crore. Moraje said that the bottom line was impacted by a one-time charge on account of goodwill deferred tax liability of Rs 52 crore due to the change in tax law. The loss in the year-ago period was Rs 630 crore.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the March quarter was down 78 percent YoY to Rs 38 crore in Q4. Moraje explained that this includes a provision of Rs 119 crore towards legacy government business.

There were lockdown-related losses in Q4FY21 from training and skill development and food businesses amounting to Rs 20 crore in Q4. Adjusted for this, EBITDA would be up 5 percent on a year-on-year (YoY) basis, added Moraje.

For the full year, Quess Corp had a net cash position of Rs 99 crore in FY21 versus a net debt position of Rs 355 crore in FY20. It has also announced its first-ever dividend at Rs 7 per share.

Sectoral outlook on hiring

Moraje said that taking a multi-year view, he is bullish on manufacturing and construction.

"There are huge tailwinds of formalisation there. As companies formalise, they outsource the jobs and manufacturing/construction sectors are among two candidates that will drive employment," he added.

Among others, he said that there is also a bullish outlook on healthcare, especially amidst the pandemic.

"Indians have realised that we need to invest in healthcare infrastructure and healthcare professionals. Professionals like phlebotomists and nurses are in demand and there is a demand-supply gap," he added.

Another area of growth is IT/IT services. He added that currently the demand far outstrips supply. As of FY21, IT staffing constitutes 13 percent of the revenue.

"This segment is growing fast. India has a huge skilled talent pool, which is what global players are interested in. With Global In-House Centres (GICs) rapidly expanding in India, job prospects are high," he added.

Individual businesses

Moraje said that businesses like Monster and QJobs have seen their share of growth, despite some caution creeping in from Q1FY22 onwards. There was a 55 percent QoQ rise in job postings to 194,000 in Q4FY21.

"At Monster, we have seen an aggressive growth in job postings. There was also a 45 percent QoQ rise in customer additions to 2,001 in the fourth quarter," he added.

For Qjobs (launched in November 2020), which is a platform purely for blue-collared workers, Moraje said that they have a lead-to- selection ratio of 30-50 percent for the in-demand job roles, driven by an auto-hiring engine.

This platform will be restricted to blue collar and grey collar jobs right now. Blue collar jobs include roles related to industrial establishments and factories and require low skills. Grey collar jobs are entry-level roles in domains like BPOs, sales executives and e-commerce delivery.
M Saraswathy is a business journalist with 10 years of reporting experience. Based in Mumbai, she covers consumer durables, insurance, education and human resources beat for Moneycontrol.
first published: Jun 4, 2021 12:11 pm
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