Quess Corp makes stellar debut, but analysts want you to ‘Sell’, here is why

By: | Updated: July 12, 2016 5:02 PM

Analysts turned bearish on Quess Corp shares after a bumper debut on Tuesday. The scrip listed at over 57 per cent premium on the National Stock Exchange at Rs 500 against the issue price of Rs 317.

bse sensex nse nifty quess corpAnalysts turned bearish on Quess Corp shares after a bumper debut on Tuesday. The scrip listed at over 57 per cent premium on the National Stock Exchange at Rs 500 against the issue price of Rs 317.(Photo: Reuters)

Analysts turned bearish on Quess Corp shares after a bumper debut on Tuesday. The scrip listed at over 57 per cent premium on the National Stock Exchange at Rs 500 against the issue price of Rs 317.

The public offer of staffing firm was oversubscribed a staggering 145 times earlier this month, emerging as the most oversubscribed IPO in the past 9 years.

Objective of the issue was to use the proceeds towards incremental working capital, acquisitions and other strategic initiatives, debt repayment and other general corporate purposes.

After the rise on debut, G Chokkalingam, founder, Equinomics Research & Advisory said, “I have strong ‘SELL’ on Quess Corp shares. Valuation bubble in post listing IPO likely to burst out.”

Chandan Taparia, analyst, Anand Rathi Financial Services said, “It is better for investors to book profit in Quess Corp after the robust debut.”

Shares of Quess Corp closed 58.68 per cent up at Rs 503 against the issue price.

Sudip Bandyopadhyay, group chairman, Inditrade Capital said, “Investors should book profit as valuations are looking expensive after stellar debut.”

Over the last four years, Quess Corp has reported a strong revenue CAGR of around 52 per cent and PAT CAGR of around 94 per cent which was largely fuelled by its strategic business acquisitions and by strong growth across business verticals. Going forward Angel Broking expects the company to report healthy growth on back of increase in industry penetration.

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