Quess Corp says first-time outsourcers are looking at flexible labour

Bengaluru: is witnessing positive growth in demand for outsourcing and formalisation of the workforce, a shift that is expected to benefit the business services provider.

Out of the 29 deal wins in the January-March period, 40% were first-time outsourcers of flexible labour. The deals resulted in 9,000 headcount additions for the company, overall.

“The thesis we have is that the labour laws and GST codes will lead to more businesses formalising. As businesses formalise, they will choose to outsource more because they want to keep flexibility,” Suraj Moraje, chief executive officer of Quess Corp, told ET.

According to Moraje, headcount growth from existing customers in the financial services and manufacturing sectors has been strong. In retail, staffing was at about 80% of pre-pandemic levels in the fourth quarter.

Quarterly results

The Bengaluru-based company reduced its fourth-quarter loss to Rs 58 crore from Rs 630 crore a year ago, on the back of revenue that was largely flat at Rs 3,005 crore.

For FY21, profit after tax stood at Rs 74 crore compared to a loss of Rs 432 crore in the previous fiscal due to an exceptional item. Revenue for the full year declined 1% year-on-year to Rs 10,837 crore.

“If you take the exceptions of two of our relatively smaller businesses—food, and training and skill development, which continue to be quite badly hit by Covid-19—for the rest of the businesses, the EBITDA was up 5% year on year,” said Moraje. EBITDA, or earnings before interest, tax, depreciation and amortisation, is a measure of the operational profitability of the company.

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On Thursday, Quess announced its first-ever dividend payout of Rs 7 per share, putting in place its capital allocation policy of returning 33% of free cash flows to its shareholders through buybacks and dividends over the next three years.


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