Stock in Action - Quess 17 December 2024

Highlights

1. The recent surge in Quess Corp share price has captured the attention of investors, reflecting a strong rebound after a decline.

2. The latest Quess Corp stock news highlights its 6.66% gain after Antique Stock Broking's ₹1,000 price target.

3. With a Quess Corp price target of ₹1,000 from Antique, investors see significant upside potential.

4. A detailed Quess Corp investment analysis suggests revenue growth driven by India's expanding gig economy & labor reforms.

5. The recent Quess Corp stock surge outperformed the sector by 6.01%, making it a standout performer.

6. The strong Quess Corp financial performance, with a 31.9% YoY profit growth, indicates solid fundamentals.

7. Positive Quess Corp brokerage ratings from top firms like Antique & Phillip Securities fuel investor confidence.

8. Ace investor Ashish Dhawan's Quess investment highlights confidence in the company's long-term growth prospects.

9. Key Quess Corp growth drivers include labor reforms, capex expansion, & opportunities in Tier-II cities.

10. The bullish Quess Corp stock forecast for 2024 predicts a potential upside of 49% from current levels.

Why Quess Stock is in the News?

On December 17, 2024, Quess Corp's stock surged 6.66%, marking a strong recovery after a four-day decline. The stock hit an intraday high of ₹710.1 & outperformed its sector by 6.01%, while the Sensex dipped by 0.29%. This rally was driven by optimistic coverage from multiple brokerage firms, including a ₹1,000 target from Antique Stock Broking, implying a 49% upside. Quess Corp’s solid financial performance, coupled with robust growth drivers like labor reforms & rising demand for staffing solutions, has reignited investor confidence.

Why did Quess Share Price surge?

Quess Corp's stock price surge can be attributed to several key factors:

1. Brokerage Upgrades:   

Antique Stock Broking initiated coverage with a "buy" rating & a ₹1,000 price target, the highest yet, citing strong growth prospects in the staffing sector. Phillip Securities & IIFL Institutional Equities also provided optimistic targets of ₹960 & ₹940, respectively.

2. Strong Financial Performance:  

• Q2 FY24: Net profit grew 31.9% YoY to ₹936 million.  
• FY24: Net profit increased 25.8% to ₹2,804 million, while revenue rose 11.3% to ₹191,001 million.

3. Positive Sector Trends:  

Quess Corp is positioned to benefit from:  

•  India's labor reforms.  
•  Rise of the gig economy.  
•  Manufacturing growth fueled by the China+1 strategy.  
•  Increased staffing penetration in tier-II cities.  

4. Market Outperformance:  

In 2024, Quess Corp's stock has gained 38%, despite an earlier correction of 18% from its peak of ₹875.

Business Operations

Quess Corp operates in the staffing & workforce management sector. It offers:

1. Staffing Solutions:  
The company provides temporary & permanent staffing services across various industries, making it a key player in India's evolving workforce landscape.

2. Technology-Enabled Services:  
Quess leverages digital solutions to enhance workforce efficiency & service delivery, catering to sectors like IT, BFSI, & manufacturing.

3. Facility Management:  
It also manages large-scale facility services for corporate & industrial clients, diversifying its revenue streams.
Quess is a midcap company with strong fundamentals, strategically positioned to benefit from India’s formalizing economy & increasing capex spending.

Superstar Portfolio Has Quess Shares in Basket

Renowned investor Ashish Dhawan holds a significant position in Quess Corp. As of December 12, 2024, his investment in Quess is valued at approximately ₹398 crore. Dhawan's overall portfolio stands at around ₹3,583 crore, with Quess delivering a 30% gain in 2024, rising from ₹523 to ₹679.

This endorsement by a top investor signals strong institutional confidence in Quess Corp’s growth trajectory.

How Long-Term Investors Should Pursue This Investment

For long-term investors, Quess Corp presents a compelling case due to:

1. Growth Potential:  
Revenue is expected to grow at a CAGR of 12% to 14% from FY24 to FY27.

2. Sectoral Tailwinds:  
Increasing demand for staffing solutions, gig economy growth, & reforms in labor laws provide a favorable environment for expansion.

3. Price Targets:  
With targets ranging from ₹940 to ₹1,000, the stock offers a potential upside of up to 49%.

4. Moving Averages:  
The stock is trading above its 5-day, 20-day, 50-day, & 200-day moving averages, indicating a positive trend, although it remains slightly below the 100-day average.

Investors should adopt a buy-and-hold approach, considering the company’s strong fundamentals & sectoral growth drivers.

Conclusion

Quess Corp’s recent rally is backed by strong fundamentals, brokerage upgrades, & favorable macroeconomic factors. As India's formal workforce expands, Quess stands to benefit from the staffing boom & gig economy trends. With potential upside targets nearing ₹1,000, long-term investors can view Quess Corp as a strategic addition to a diversified portfolio, capitalizing on India's economic growth story.