Best Performing IPO – Quess Corp

HR Staffing firm Quess Corp on Tuesday (July 11, 2016) made a stellar debut by listing at Rs 499 on BSE, a premium of 57.41 per cent over its issue price of Rs 317.

The IPO was open between June 29 and July 1.
 

 
Data suggests that the subscription to Quess Corp was 144.50 times which is the highest since January 2008. 

Let us take a quick snapshot of the company

Background
 
Quess Corp Ltd (QCL) is the group company of Fairfax/Thomas Cook group.

It offers services across many sectors like IT and ITES staffing, managing facilities, F&B sector, skill development training, general staffing, HR solutions, engineering services, etc.

Headquartered in Bengaluru, the Company has pan-India presence with 47 offices across 26 cities, as well as operations in North America, the Middle East and South East Asia.

As of March 31, 2016, its Key Clients include some of the world’s largest, reputable organizations, including 20 companies ranked in the 2015 Fortune Global 500 list.

It serves over 1300+ customers across 4 segments namely, Global Technology Solutions, People & Services, Integrated Facility Management and Industrial Asset Management.
 
QCL’sdiversified service offerings across various industries and geographies enable it to ensure diversified revenue streams, stable cash flows and reduce vulnerability to economic cycles and geography-specific risks as well as reduce dependence on any set of significant clients.
 
Company’s integrated service offerings also provide it with significant operating efficiencies as well as cross-selling opportunities for repaying its debt, funding capital expenditure, incremental working capital etc. The company came out with its maiden IPO of equity shares priced ofRs. 10 each via book building route in a price band of Rs. 310-317.
 
Minimum application was for 45 shares and in multiples thereon, thereafter. The issue had reserved quota of 75% for QIB’s 15% for HNIs and 10% for retail segment.
 
Most of its equity issue is made at par except in December 2010 it issued some shares at a price of Rs. 56.68.
 
It also issued bonus shares in the ratio of 3 for 1 in January 2016.Post IPO its current paid up equity capital of Rs. 113.33 crore will stand enhanced to Rs. 125.95 crore.
 
Company Financials

For the year/period ended (in Rs. Million)

31-Mar-16 31-Mar-15 31-Mar-14 31-Mar-13
Total Assets 12,378.68 7,190.96 3,309.11 2,541.99
Total Revenue 34,424.26 25,727.58 10,043.52 6,394.35
Profit after Tax 885.21 672.16 171.02 83.05

 
On the performance front, For 15 months period ended on 31.03.15 it has reported turnover of Rs. 2572.76 crore with a net profit of Rs. 67.22 crore. For the fiscal 2015-16 it has posted turnover of Rs. 3442.43 crore with a net profit of Rs. 88.52 crore.
 
Thus the company has (on consolidated basis) posted CAGR of around 52 per cent in top line and around 81 per cent in bottom line.
 
In Fiscal 2016 company’s top 10 clients contributed 30.40% of its total revenuewhich reduces its dependency on specific clients.
 
Quess has managed its debtor’s days in the range of 40-45 days,
 
Management is confident of continuing its quest of growth in coming years.
 
IPO pricing

The IPO was priced at a P/E of 45 (based on post issue equity)
 
Team lease is the nearest peer in human resource service sector that is trading at a P/E of 65 plus

Conclusion

This company has reported robust earnings growth and sound financial ratios, healthy track record of growing via inorganic route and focus on margin improvement.
 
It is more diversified, de-risked and profitable than most of its competitors,

This company is a niche player and has the first mover advantage in the segment.
 
Based on all the available data, it may be concluded that the companymay be considered by investors for long term investment.

 

Happy Investing!!

 

prashant.mehta@acm.co.in
 

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.

No votes yet.
Please wait...

Leave a Reply

2 × 5 =

"Prevent unauthorized transactions in your trading and demat account- Update your mobile numbers/email IDs with your Stock Broker and Depository Participant. Receive information of your transactions directly from Exchange on your mobile/email at the end of day. Receive alerts on your Registered Mobile for all debits and other important transactions in your demat account directly from CDSL on the same day call us on 02228584545 Email : customerservice@acm.co.in

Copyrights @ 2013 Asit C Mehta Investment Interrmediates Ltd.(ISO 9001:2015 certified company)