Shares of Quess Corp are higher by 10% in early trade after Antique Broking initiated coverage with a Buy recommendation and a target price of Rs 1,000 per share on improved growth outlook.
Quess Corp shares are rising on very strong volumes to climb above 20 and 50-DMA, clocking its best day in over 12 weeks. The target price assigned implies a 50% upside from the Monday's closing price.
The Antique Broking note said the growth momentum is expected to continue for Quess Corp as the company is set to benefit from strong hiring trends across segments. "Increased formalisation of the economy driven by labour reforms, rise in the gig economy, capex push through PLI schemes, higher thrust on manufacturing driven by China+1 strategy, lower staffing penetration and opportunities in Tier-II cities are the key growth driver," the note said.
Quess is also witnessing strong momentum in the BFSI, manufacturing and telecom space due to rapid urbanisation and growth of Global Capacity Centres in India, said Antique, adding that its revenue could rise by a 12-14% CAGR over FY24-27.
For the year, shares of Quess Corp are higher by 40% while the benchmark index Nifty 50 is up 12.7% and the Nifty Midcap 100 index is up 29% on YTD basis.
The note highlighted strong steps taken by the management, including efficient capital allocation, operational efficiency, and consolidation of business along with the demerger. Quess Corp had recently mentioned that the company expects its demerger to be completed by the end of this financial year, with the three separate entities likely to be listed by Q1FY26. In February 2024, the company had announced plans to demerge into three separate businesses.
Antique is confident of the hiring trend to stay strong for the medium term, with double digit growth seen in banking, manufacturing and consumer sectors. While demand for traditional IT services are muted, Antique note said it sees GCCs to growth labour growth, with hiring for IT services poised to pick up in FY26. Track Quess Corp's earnings here. During Q2FY25, Quess crossed the milestone of 6 lakh headcounts, with most net additions seen in BFSI, e-commerce and logistics. Karnataka was the leading state where Quess added most headcounts in Q2FY25. GCCs contributed with around 68% in revenue terms during Q2FY25.
Margins from hiring by Global Capability Centres (GCCs) were three times higher than those in information technology (IT) staffing, Quess Corp had said.
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