Near-term headwinds likely to keep staffing solution companies muted

Stocks of staffing solution companies have underperformed the broader markets in November. While two of the leading companies in the space — Quess Corp and TeamLease Services —are down 14-22 per cent, SIS is down 7 per cent during the period. A mixed set of September quarter results for the 2022-23 financial year (Q2FY23) and muted near-term outlook led to the decline.

While TeamLease’s performance was in line with estimates, operating performance of Quess and SIS disappointed the Street. TeamLease posted a 28 per cent growth, led by a 20 per cent year-on-year (YoY) rise in headcount and wage inflation, while growth for Quess stood at 32 per cent. SIS posted a 14 per cent YoY growth.  

Though Quess’ revenue