Quess Corp demerger process likely to complete within a year: Chairman
demerger process of Quess Corp, aimed at unlocking value at India's biggest third-party supplier of private-sector staffing needs, is likely to be completed in up to a year. The company may soon file an application with the National Company Law Tribunal (NCLT), Ajit Isaac, its chairman, told ET.
«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 said.
Quess Corp stock has rallied 44% in the past year compared to a 22% gain in the Sensex. Currently, Quess Corp is trading at 30 times its trailing twelve months' earnings, compared to 44 times its listed peer TeamLease currently trades. Quess Corp's operating profit margin was 4% in FY24, while TeamLease's profit margin for FY24 was 1%. Quess enjoys a better operating profit margin, while TeamLease performs better on the return on equity front.
Quess Corp has a workforce of more than 550,000 associates. It announced a demerger in February this year, citing that it will create a simplified corporate structure by separation into independent entities and provide enhanced clarity and management focus to accelerate growth. It will also result in an optimal capital allocation strategy for each entity to invest in their strategic priorities.
As per the proposed demerger scheme, the workforce management business will remain in Quess Corp, while Digitide Solutions will
