In conversation with Ravi Vishwanath, CFO, Quess Corp Ltd

On the whole, post-pandemic strong economic revival will create positive scope for our medium to long-term earnings for FY23; asserts Ravi Vishwanath, CFO, Quess Corp Ltd

What is your outlook on the Indian workforce management space? What are the key emerging macro trends you are witnessing in the post-pandemic world?

We have started the current quarter on a very strong note and have not witnessed any weakness as far as the business segments are concerned. At any point in time, we continue to have about 20,000 to 25,000 open positions that need to be filled up. Neither interest rates nor inflationary trends have caused us any dents and we see a steady pickup in hiring across the workforce management segment. The projection for this year continues to be positive and looks even better than last year for Quess General Staffing as both Q1 and Q4 were impacted substantially by the pandemic.

The telecom and manufacturing sectors are gaining momentum due to the implementation of the PLI scheme by the government. The IT sector will continue to do well but the absolute frenzy which we have been witnessing in the past few quarters should settle down and go back to some kind of normalcy. The organised retail sector which was absolutely absent for the past two years is making a slow but steady comeback as well. Overall, the sentiment is positive and the various segments will definitely pick pace as the pandemic turns into history. For example, the tourism and hospitality sector is regaining normalcy at a quick pace.

For FY22, Quess Corp has reported its highest ever revenue and PBT. Net profit for FY22 witnessed robust YoY growth of 241 per cent. What factors are responsible for your stellar outperformance?

The segments which are showing tremendous promise and where the growth largely comes from are banking, financial, insurance and services (BFSI), logistics, supply chain, e-commerce and manufacturing industries. The retail sector has also steadily been opening up as is the telecom sector with networks being upgraded and intensified. Currently, workforce management is in a sweet spot. The IT staffing division is doing extremely well as demand for talent has scaled up substantially over the past few quarters. The operating asset management business, however, has been giving us some sleepless nights despite surging past the pre-pandemic levels as it has not kept pace with other platforms like workforce management and technology solutions.

Offices and institutions have not completely opened for us to feel comfortable enough in the business but we have done a lot of backend process improvement over the last two years and that should help us once businesses pick up in the wake of offices reopening fully. As far as our global technology businesses are concerned, Conneqt Business Solutions, which is the country’s largest domestic contact centre, has been on the road and we expect it will continue to do well in the current year as well. Allsec Technologies has picked up with regards to the number of pay slips it has processed – more than a billion a month. Our Monster and Taskmo businesses have also scaled up quite well.

Qjobs platform crossed 3.5 million candidates and 2 million active job openings in FY22. What is your vision for this segment over the next 2-3 years? What are the opportunities you are focusing on?

The blue collar segment will continue to do well with demand picking up substantially during the festive season. The months between June and December often witness an increase in temporary hiring in India as this season witnesses a surge in the number of events taking place across the country. What heralds as good news is that blue collar hiring has substantially picked up as compared to last year and our mandates are upwards of anywhere between 30-50 per cent as compared to last year. We have also been working to integrate technology in the hiring process to automate and streamline the same. This includes all aspects of the business from blue to white collar segments.

At the moment, what are your top three strategic priorities?

Our strategic priorities are quite straight through the year FY23. First, we want to simplify our corporate structure where our focus will be on streamlining our subsidiaries in India and overseas. Secondly, we are looking at growth in our sales acceleration and putting all effort into ramping up our sales team. Lastly, the cost-to-serve would be another focal area, where we are bringing in a lot of digital initiatives which will enable us to improve our efficiency. So, these are a few strategic approaches we are taking up to ensure growth in this financial year.

Can you highlight your key growth drivers over the medium term?

In FY22, our major businesses have continued to demonstrate exceptional growth, driving consolidated revenues up by 26 per cent YoY and 3 per cent on QoQ basis. We achieved the highest ever revenue of Rs 13,692 crore and EBITDA for the quarter of Rs 185 crore, which clearly signifies our execution capability. We continued to leverage our service platform to offer solutions to our customers, leading to an exponential growth in cross-selling which later matured into a sales culture. Similarly, several factors contributed to our remarkable turnaround.

For instance, after the first year of the pandemic, considering companies are investing huge amounts in technology advancement, we immediately refocused our IT staffing, IT selection and recruitment business. Moreover, since we have placed immense focus on our value-added services in the past few quarters, our sourcing efficiency reached a new level through general staffing, resulting in healthy revenue growth. The other significant drivers could be the steady-state growth in Singapore in terms of improving margin trajectory and new headcount additions.

What is your earnings’ outlook for FY23?

We intend to take the margin back to the pre-pandemic levels. Some of the industries we are extremely bullish about are manufacturing and construction. Looking at these growth potentials, we have already doubled the sales team and invested in strengthening our business catering to these sectors. As a result, our sales team today is twice the size of the team we had just six quarters ago, which is 55 per cent more than what we had four quarters ago. We can also expect huge revenue growth in e-commerce and logistics, where we are growing significantly by 40 per cent. Besides, retail and consumerism are back to full capacity, which will also add to our earnings’ growth for the new financial year. On the whole, post-pandemic strong economic revival will create positive scope for our medium to long-term earnings for FY23.