The technology and business services provider is planning to explore share buyback.
Bengaluru-based Quess Corp, which is backed by Fairfax, witnessed a dip in its shares by almost 60 per cent in the last one month. Its shares have fallen approx. 74 per cent from the yearly high in the wake of a stock market meltdown amidst the pandemic.
The Indian technological and business services provider is presently looking at a share buyback. Market analysts claims the stock price of the Company has been facing selling pressure due to redemption requirements and margin pressure faced by few institutional and high-net-worth investors.
The Company expects the current crisis to fast forward the formalisation of the economy and the blue-collar market as well. The fate of the blue-collar worker hangs in the balance as the lockdown continues. The Company’s stock price has dipped to an all-time low, closing at 213 per unit on March 24. This has raised concerns in the market as to what its short-term strategy will be. The Company’s decision to explore buyback comes after the stock prices dipped, presenting a viable opportunity.
Quess Corp is currently trading at a PE 12 times after its 12-month profit, when for the past five years, it has had a consistent growth rate of 71.81 per cent. For the last three months its return on equity has been quite low, trailing at 13.28 per cent.
Analysts in the market have raised questions about how the business model of Quess will survive in the current scenario. The Company, on the other hand, remains hopeful that with more and more blue-collar workers looking for security net, and companies looking to outsource more, the informal sector will get formalised and opportunity will be available for the Company.