The company’s technology solutions business (27% of revenues) earns a better margin compared to the staffing services business (57% of revenues). Quess Corp’s strategy has been to grow via acquisitions, completing nine till date which contribute to 20% of its revenues, the management said. The staffing services business has a good growth potential, with Crisil Ltd estimating it to increase from Rs.20,000 crore in revenues in FY14 to Rs.62,500 crore in FY19. Quess Corp plans to use part of the issue proceeds to repay Rs.50 crore of debt, and deploy Rs.71.7 crore and Rs.157.9 crore towards capex and working capital needs, respectively. However, if its appetite for growth through acquisitions remains high, and if these acquired firms come with similar working capital needs, then the pressure on its balance sheet may continue.

Source: Mint June 27, 2016 20:03 UTC