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00:00 Kamalpal Hooda, Group CFO and Guru Prasad Srinivasan, ED and Group CEO at QuestCorp joins in.

00:07 Good morning, gentlemen. Thanks for joining in. It's been a good year for QuestCorp. I do remember

00:13 you indicated last year that you'd strive for a 20% growth in F524. What we've got is about 11

00:19 odd percent. But still record numbers on top line. It's been a tough year, which we appreciate.

00:25 Going into F525, what is it looking like? Even the aspiration of a 4% margin in F524 is pretty

00:32 much achieved. Into F525, margin improvement, revenue guidance, please share with us.

00:37 Sure. Thank you so much for having us on the show. Yes, our revenue growth has been 11%.

00:44 But however, EBITDA growth has been phenomenal. It's about 18% year on year.

00:50 PAT has really grown 26% year on year. So many parameters that we had set for ourselves,

00:56 we have achieved, whether it is the EBITDA margin, we started the year at 3.42% and it ended the

01:02 year at almost about 3.92% with a blended average of 3.6%. So I think all the parameters that we had

01:09 set for ourselves, whether it is operational efficiencies that we wanted to bring in,

01:13 the sales growth and efficiencies that we wanted to bring in, plus the technology

01:19 investments that we did to bring our cost to serve down. I think everything that has played

01:23 well in terms of closing the year at a very high note. And we have ever achieved the highest ever

01:29 EBITDA for Q4 and for the year as well. So we are quite delighted with the result,

01:34 what we have done for ourselves. And as we step into F525, of course, two of our platforms, which

01:42 is GTS, Global Technology Operations and Operating Asset Maintenance. These two businesses are high

01:49 margin businesses, high EBITDA margin businesses, and they continue to grow. They are having a good

01:55 set of sales pipeline and funnel and order book for these two platforms. Plus our workforce,

02:03 we are quite glad and happy to announce that we have crossed 400,000 by headcount in our workforce.

02:11 And here on, of course, there are a few sectors which are going to be very

02:15 argumenting this for F525, for us specifically, manufacturing and BFSI and telecom. So we are

02:23 seeing the demand coming in from these segments. So we are quite, I think we are entering into

02:27 F525 with a very strong foot. Mr. Hoda, let me come to your profits,

02:35 which have gone up. There is an exceptional item, I think of about 20 crores this quarter. Can you

02:41 tell us more about it? And has that sort of boosted at the end of the day, the net profits as well?

02:48 So the exceptional profits in the current quarter is due to the investment that we did for one of

02:56 our businesses, QTG, which was into break-fix business. But if you see on an overall basis,

03:02 if you take aside any exception on a full year basis also, if you see, the profit after tax has

03:08 gone up to 280 crores and the EPS has gone to 18.6 rupees per share, both of them being in excess of

03:15 26% and 24% on a year-on-year basis. What can you tell us about FoundIt,

03:22 formerly Monster, which you acquired? How long do you see the path to break even?

03:29 Yeah, so we had given guidance that FoundIt should exit the financial year F524 at a break-even.

03:35 Happy to share that the Q4 sales run rate for FoundIt has crossed 50 crores on a quarterly

03:41 basis and it is very near to break-even. The burn in quarter four for FoundIt was close to around

03:48 4 crores. The full year annual burn in FoundIt this year in F524 was close to around 56 crores,

03:54 down from 95 crores last year. And as we move into the next financial year,

03:59 we hope on a full year basis we will be able to get phenomenal growth in FoundIt.

04:03 The burn that we did last year of around 56 crores, we should be able to bring it down to zero

04:09 as we move into F525. Mr. Srinivasan, coming on, how do you expect

04:17 the different verticals to be like in times to come? Because while workforce management is still

04:25 about 70% of your revenue share, one would believe that things like verticals like global technology

04:31 services, etc. might do well over time. And I don't know if it's connected, but there is a lot

04:37 of appetite of GCCs getting up in India in a big way. Does that become a big hiring trend for a

04:45 company like yours? It's a great question. And we're also working a lot, putting a lot of blocks

04:54 together. So, you know, for F525 specifically, if I talk about workforce, we are getting into a more

05:02 vertical-based approach. And it's important because each of our verticals, the large three

05:07 verticals, I mean, we have four large verticals, BFSI, telecom, consumer durable and manufacturing.

05:14 So of this, at least three verticals, excluding BFSI, we already crossed 50,000 by headcount.

05:20 And specifically manufacturing, we are almost about 70,000 by headcount. BFSI, we almost

05:27 crossed about 120,000 by headcount. So what it needs is a more focused approach. The solution

05:36 or the hiring strategy or a platform is going to be very different than the other verticals.

05:40 So we are getting more granular in terms of our execution. So we know that growth is going to

05:45 come from each of these verticals and they would be measured very independently. Similarly, in IT,

05:50 GCC focus, if you look at most of my mandates that we are currently delivering, almost 90%

05:58 is from GCCs. So we have carved out a specific solution around GCCs to capture. And GCC currently

06:04 employs almost about 1.6 million people. And we have more GCCs coming into the country.

06:12 And we did a very specific approach. So for Quest, across this year is going to be more

06:18 focused at a vertical level to create more solution and be closer to customers.

06:24 That is something that we are focusing across, whether it is a platform of GTS or whether it

06:28 is platform of OAM, we are more focusing on vertical based approach. And what does this

06:34 therefore mean for growth for you? Because when one looks from March 21 to 24, not double,

06:41 but you've grown about 75% on aggregate. Is there a target that you're setting for the next three

06:46 years or the next five years for revenue growth? So generally, we don't give a forward guidance.

06:51 Not a formal guidance, but broadly. Yeah. But if you look at Neeraj,

06:55 India is in its state of investment at the moment where it is, I'm sure once the elections are done,

07:02 it will be much more firmer to see the way the trajectory is going into. And we are seeing the

07:07 investment coming into specifically in manufacturing and utility infrastructure. And all these are

07:13 employment intensive industries. And we are directly linked to the economy in that space.

07:19 So from that standpoint, at least two to three times of GDP growth should be our growth as well.

07:25 This is a great opportunity, Mr. Srinivasan, to also get your sense on trends.

07:32 Now, when we saw the results coming in for the top IT companies, their net hiring year on year

07:39 was down and down by several years. Are you seeing that trend continue? IT, ITES,

07:47 what is the outlook there? I would say yes, without any hesitation at the moment,

07:52 because we are on forefront to receive the mandates, right? So Q4 in itself, we have seen

07:57 almost about 11,200 headcount coming down in IT sector, specifically IT services sector.

08:04 And full year, I mean, on an annualized basis, almost close to about 70,000 people.

08:08 Q1, we are still not seeing a great uptick. But however, I think, you know, the more mandates are

08:15 coming in from GCCs, as I said earlier, we need to wait and watch for IT services sector to come

08:23 back. And I'm sure when it comes back, it will come back really hard. So it's been most awaited.

08:29 So what are the sectors that are seeing positive mandates for hiring in that case?

08:34 Because if IT, ITES is looking slow, then that's not great news overall for the industry or for

08:41 you. So where is the demand coming from? So specifically in IT, it's largely from GCCs.

08:47 Again, it cuts across every sector in terms of whether it is product, automobile, engineering

08:51 services. But, you know, when it comes to specifically to workforce, manufacturing,

08:57 telecom, BFSI and retail are four sectors which are contributing to the growth.

09:02 Right. You want to comment on this one too, Mr. Huda? I want to understand from you,

09:09 in terms of acquisitions and growth, where is that growth and acquisitions going to come from?

09:16 Are you looking at buying out companies? You've been on the spree recently, at least.

09:21 And also, what does that mean for the debt on your books? I know you talked last year about how

09:25 you wanted to actively work on reducing debt. Where does debt stand and what are plans going

09:30 ahead in terms of acquisitions? Yeah, thank you for that question. So let me first answer the

09:35 debt part. We had set a target for ourselves and happy to report that we've achieved that.

09:40 So we could retire close to 150 crores of debt in the last financial year, FY24. And the present

09:46 debt levels at a gross debt level, we are around 370 crores. Cumulative in last five years, we have

09:53 repaid close to around 700 crores of debt. So we are at a very comfortable levels of debt. In fact,

09:58 we are a net cash company at a consolidated level of our net cash stands at around 232 crores.

10:03 So that's on the cash and the debt position. As far as acquisition is concerned, if you look at

10:08 history in last, I think four years, we've not done any acquisition where, you know,

10:13 the capital allocation policy has been announced. We're looking to focus only on our core business

10:18 and that has also led to we divesting some of our non-core businesses. We actually did a divestment

10:25 last year. And again, you know, in quarter four, we completed a divestment for one of our businesses,

10:32 which was QDG. And, you know, in quarter one, we just completed again a small divestment of

10:38 division in Allstate, which is Co-Achieve, which is into the compliance business. So we're not

10:42 looking for any active acquisitions right now. The intent is to focus on our core businesses.

10:48 Like Guru said, you know, a large part of the business is linked to the strength of the growth

10:51 of the Indian economy and with investments coming in infrastructure, real estate, infrastructure,

10:57 utilities and manufacturing, which are high employment intensive areas, we would love to grow

11:04 our organic businesses with the growth of the economy.

11:09 Very quickly, Guru, do you think there's a good possibility of margins improving about 4%? You've

11:16 made 4% this quarter, FY25. Does the range move upward? Of course, I know all effort around that

11:26 to see how few basis points we can go up. So I'm sure I think we'll work towards that.

11:34 All right. Thank you so much. That was the top management of Quest. They've had a good year,

11:39 but I think of the many, many things they've said to us,

11:42 the takeaway that Q4 is still looking weak for IT, ITES is also an important one.

What Does FY25 Have In Store For Quess Corp? | NDTV Profit

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