BackQuess Corp share price jumps over 15% to touch 52-week high as board approves demerger plan
Quess Corp's share price surged over 15% to hit a 52-week high after the approval of its demerger plan. The company will split into three separate businesses to enhance shareholder value.
PremiumQuess Corp share price jumped over 15% to touch its 52-week high on Monday's trading session, following the announcement that the firm will split into three distinct businesses in an effort to unlock shareholder value. During the company's board meeting on Friday, the demerger plan was approved. Quess Corp share price today opened at an intraday high of ₹580 apiece on BSE.
“Quess Corp share price has seen a strong gap-up opening and is up 11% now. This move is supported by huge volumes, and we have seen a recent price range breakout. The view remains positive; however, one should have a buy-on-dip approach. Support is seen around ₹545, while ₹600 is resistance," said Rajesh Bhosale, Technical Analyst at Angel One.
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According to Ruchit Jain, Lead Research Analyst at 5paisa, the stock has given breakout from a consolidation phase with good volumes. The momentum could continue and stock could head towards ₹600 in the near term.
Quess Corp, Digitide Solutions, and Bluspring Enterprises will become independent listed businesses as a result of this. Workforce management (Quess), business process management, HR outsourcing and Insurtech (Digitide), facility management, industrial services, and investments (Bluspring) will be within their purview.
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For every share held in Quess Corp, shareholders will get one share in each new firm. It is likely to require 12 to 15 months to complete the demerger.
In an exchange filing, the company said that it intends to reorganise and segregate its business portfolio in order to strengthen the value proposition for customers, unlock significant long-term valuation and upside value creation for the shareholders (through focused management, clearer choices of capital allocation, etc.), and give investors, strategic partners, lenders, and stakeholders the flexibility to participate in some or all of these distinct businesses.
“This is a landmark moment for Quess and is a transformational decision to create three separate entities. It helps the management to focus, develop capital allocation plans relevant to each business, and create value for our shareholders.
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The decentralised structure at Quess has enabled a pathway for the three demerged entities to continue a culture of entrepreneurship, an employee-friendly workplace with customer centricity being at the core of our purpose. We believe that the heavy lifting to create these entities has been done and it is now time to unlock value through this demerger," said Ajit Isaac, Chairman of Quess Corp.
Brokerage house Nuvama Institutional Equities raised its target price by 8.6% in response to this news development and views Quess Corp as a compelling risk-reward opportunity with significant value unlocking triggers and little possibility for downside. The brokerage house has retained ‘buy’ call on the stock.
“We reckon that even if Quess’s staffing business gets valued at a 20% lower EV/EBITDA than Teamlease’s, it is worth about Quess’s current total market cap—implying high odds of medium-term upside. Given the value unlocking trigger, we are raising the target price to ₹630 (from ₹580), valuing Quess at 25x (earlier 22.5x) FY26E EPS; retain ‘BUY’," the brokerage said.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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