Quess Corp shrugs off CEO’s exit to focus on strong Q3 earnings

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26 Aug, 2025 12:21

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Shares of Quess Corp surged over 6 percent on February 11 in early deals as investors shrugged off the resignation of the Managing Director and Chief Executive Officer Krishna Moraje given the strong earnings performance for the quarter ended December.

Quess Corp on February 10 announced that the board has accepted the resignation of Moraje just two years after his appointment at the company. Moneycontrol had exclusively reported that the board may accept Moraje’s resignation at the board meeting on February 10 following differences over strategy between the CEO and the promoter.

While the resignation of the CEO is a setback, the quick appointment of Guruprasad Srinivasan placated investors’ nerves for the time being. However, brokerage firm Sharekhan by BNP Paribas said with a change in leadership, the company will find it difficult to achieve its target of 20 percent annualised growth in operating cash flow and 20 percent return on equity over the next 3-4 years.

That said, the focus of the market for the time being appeared to be on the company’s December quarter earnings performance. Quess Corp reported a 31 percent year-on-year rise in revenues to Rs 3,685 crore for the reported quarter led by strong growth in IT sector staffing and general staffing.

The country’s largest staffing company saw its operating profit rise 19 percent on-year to Rs 179 crore with margins deteriorated 50 basis points to 4.9 percent. The company’s net profit in the reported quarter surged 94 percent on-year to Rs 89 crore.

Sharekhan, however, remains unconvinced by the December quarter performance of the company and sees the exit of Moraje as an overhang on the stock. “We recommend book out on the stock in view of exit of the top leadership and bleak visibility of an improvement in the profitability in the near term,” Sharekhan said in a note.

At 9:48 AM, shares of Quess Corp were up 4.55 percent at Rs 689.6 on the National Stock Exchange.