Quess Corp is on track to complete its demerger process by the end of FY25 despite facing some delays from the National Company Law Tribunal, the company’s management told NDTV Profit on Tuesday.
The company had last year announced that it would demerge into three separate listed entities — Quess Corp, Digitide Solutions and Bluespring Enterprises.
Talking to NDTV Profit, Kamal Pal Hoda, group chief financial officer of Quess Corp, said that the demerger is likely to be completed within the fourth quarter of this fiscal.
“This demerger is expected to be completed in the current quarter which is Q4, which means that by Q1 of next financial year, we will have three large listed companies,” he said.
Group Chief Executive Officer Guruprasad Srinivasan further said that the Jan. 30 hearing date from the NCLT has been deferred to Feb. 5, revealing that the process is facing delays.
“We are going through the process and the first we had shareholders and creditors clearance in Q3 followed by we had our second motion on January 30,” he said.
“This is through the NCLT process and we’ll have to withstand it and have some patience. So it is now further deferred by a week. Our next hearing is some time on the 5th of February,” the CEO added.
Srinivasan mentioned that the process will be over by March 2025.
“We strongly feel that the process should get over by March so we are on course to it,” he said.
Quess Corp on Jan. 29 released its Q3 results, where the company saw a year-on-year drop in margins to 3.6% from 3.9%.
Talking about the margin pressure, Hoda explained that there are a few reasons behind the drop.
“We did see a bit of growth mute in some of our sectors. If you look at the macroeconomic indicator also, I think the real GDP growth probably was the lowest in the last seven quarters. So was industrial production and domestic urban consumption,” he said.
The demerger has also resulted in a slight drop in margins, the CFO explained.
“On the back of the demerger, we’ve been making significant investments in sales and leadership, which is also showing a short-term dip in margins,” he said.
“Thirdly, some of our businesses have cyclicality in Q3, which comes back in Q4. So these were some of the reasons for having a margin dip. But if you see the overall performance, as management, we are pretty satisfied,” Hoda added.
Shares of Quess Corp Ltd. closed 1.11% lower at Rs 615.70 apiece on the NSE on Tuesday, while the benchmark Nifty 50 ended 1.62% higher at 23,739.25 points.
. Read more on Business by NDTV Profit.The company had last year announced that it would demerge into three separate listed entities — Quess Corp, Digitide Solutions and Bluespring Enterprises. Read MoreBusiness, Markets
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