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Quess Corp’s profit down due to a slowdown in IT hiring, cash burn, says Group CEO of Quess

Business services provider Quess Corp attributes a number of factors to the decline in net profit for the June quarter, which totaled ₹48 crore. These include a slowdown in hiring for IT positions, increase in overall costs, and cash burn from investments in North American professional staffing and Monster.com, which has been rebranded as foundit, according to a top company executive.

The staffing company’s EBITA remained unchanged at ₹154 crore, matching the previous year’s figure of ₹153 crore. However, the EBITDA margin saw a decline of 51 basis points, falling from 3.9 per cent in the previous year to 3.3 per cent in the current year.

In the coming quarters, the staffing company expects to improve the EBITA margins and its bottom lines, mainly due to reducing the cash burn and losses in North American staffing should be drastically reduced. “In fact, we expect both our investments—North American professional staffing, and Monster, rebranded foundit to break even by the fourth quarter,” explained Guruprasad Srinivasan, Executive Director and Group CEO of Quess. Currently, the company is investing ₹20 crore in foundit on a quarterly basis.

Optimistic about growth rate

In a broader sense, the company remains optimistic about achieving a growth rate ranging between 16 and 20 percent for the upcoming quarter, driven by substantial demand emanating from sectors including manufacturing, BFSI, retail, telecom, and more. Its total revenues grew by 16 per cent year-on-year, hitting ₹4,600 crore as compared to ₹3,979 crore in June 2022.

The company added more than 15K employees, totalling an overall headcount of 525K. Additionally, 35 per cent of the associates who joined in Q1 entered the formal workforce for the first time. It acquired 183 new customers, setting us up for growth over the next few quarters.

Furthermore, another focus area for the company remains reducing its debt levels. During FY24, the company aims to reduce debt by about ₹100 crore.

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