Quess Corp gains on strong Q2 results, acquisitions

Quess Corp rose 3.91% to Rs 620.25 at 10:14 on after consolidated net profit increased 22% to Rs 30 crore on 2.7% rise in revenue to Rs 1018 crore in Q2 September 2016 over Q1 June 2016.

The result was announced after market hours yesterday, 19 October 2016.

Meanwhile, the S&P Sensex was up 205.61 points, or 0.73%, to 28,189.98.

On BSE, so far 37,142 shares were traded in the counter, compared with an average daily volume of 1.24 lakh shares in the past one quarter. The stock hit a high of Rs 625 and a low of Rs 609 so far during the day. The stock hit a record high of Rs 651.25 on 4 August 2016. The stock hit a record low of Rs 452.40 on 14 July 2016. The stock had outperformed the market over the past one month till 19 October 2016, gaining 9.71% compared with 2.27% fall in the Sensex. The scrip had also outperformed the market in past one quarter, rising 20.5% as against Sensex’s 0.71% rise.

The stock was listed on the bourses on 12 July 2016.

The mid-cap company has equity capital of Rs 126.75 crore. Face value per share is Rs 10.

Quess Corp’s earnings before interest, taxes, depreciation and amortization (EBITDA) margin increased to 5.4% in Q2 September 2016 from 5.3% in Q1 June 2016.

Separately, Quess Corp announced after market hours yesterday, 19 October 2016 that it has entered into a definitive agreement to acquire a 49% stake in Terrier Security Services (India) Private Limited for a consideration of Rs 72 crore, marking its entry into the manned guarding and security solutions business. With a track record of over 27 years, Terrier is among the leading providers of manned guarding services in India. In addition, Terrier also provides training services for security personnel and electronic security solutions to clients.

Terrier has a pan India footprint with presence across 14 states spanning 60 cities. The company has over 400 clients including marquee names in the information technology, engineering and automobile sectors and a deployed head count of over 16,000 guards as on 31 August, 2016. The company closed FY 2016 with revenue of Rs 220 crore and EBITDA margin of 5%. Closing of the transaction is subject to, inter-alia, fulfilment of certain conditions precedent set out in the agreement between the parties to the satisfaction of Quess, and statutory and regulatory approvals.

Separately, Quess Corp announced after market hours yesterday, 19 October 2016 that it has entered into a binding agreement of terms to acquire a majority stake in Comtel Solutions Pte. Ltd, marking Quess’ entry into the technology staffing domain in Singapore. Closing of the transaction is subject to, inter-alia, fulfilment of certain conditions precedent set out in the agreement, to the mutual satisfaction of both parties, and statutory and regulatory approvals. The transaction is expected to provide a significant boost to Quess’ operations in Asia Pacific where it already has presence in Malaysia, Philippines and Sri Lanka.

Comtel is one of Singapore’s largest independent staffing companies with services offered across staffing solutions, managed services solutions, and recruitment and search services with operations across Malaysia and Indonesia. Comtel serves more than 60 clients, including marquee names in BFSI, Engineering and IT sectors. The Company grew at a CAGR of about 27% between FY 2014 to 2016 and closed FY 2016 with revenues of SGD 82 million and currently has a headcount in excess of 1,400 associates.

Quess will initially acquire 64% in Comtel while the balance will be acquired in a phased manner over FY 2018 to FY 2020. Quess and the current Comtel management will work towards rapidly expanding the platform bringing together their respective expertise and local knowhow.

Separately, Quess Corp announced after market hours yesterday, 19 October 2016 that it has entered into a definitive agreement to acquire 45% stake in Simpliance Technologies Private Limited. Simpliance is a Bengalaru based compliance Technology firm. Simpliance will continue to be managed by the existing key management personnel headed by Anil D Souza. Quess will pay a consideration of Rs 2.5 crore as fresh equity for a 45% stake and the investment will be used to enhance the existing platform.

Quess Corp provides comprehensive solutions including recruitment, temporary staffing, technology staffing, IT products and solutions, skill development, payroll, compliance management, integrated facility management and industrial asset management services.