PROJECT REPORT FOR SUMMER INTERNSHIP

Internship Title
“Equity Analyst’’

By
Tilak Raj Sahu
Roll No: 202213044
PGDM BATCH 2022-24

KRG Consultants Strategy Pvt Ltd.

Guide of the Project
Mr. Kailash R Gandhi

Dr. Rajnandan Patnaik

Professor
Institute of Management Technology, Nagpur

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 ACKNOWLEDGEMENT

It gives me immense pleasure to express my most profound sense of gratitude and sincere
thanks to my highly respected and esteemed guide Dr. Rajnandan Patnaik for his valuable
guidance and encouragement in completing this work, his open approach and unique
management style stirred curiosity within me. His valuable suggestions for this whole work and
cooperative behaviour are sincerely acknowledged. I must also thank him for proofreading and
guiding me extensively on the report's structure.
I sincerely thank Mr Kailash R Gandhi, (Director, KRG Consultants Pvt Ltd.) for extending his
guidance and encouragement to work on this project. I am obliged to him for setting apart time,
from his busy schedule for guiding me through the contents of this report.
I also wish to express my indebtedness to my parents whose blessings and support always
helped me to face the challenges ahead. At the end I would like to express my sincere thanks to
all my friends and others who helped me directly or indirectly to make this FINAL PROJECT
report successful.

Tilak Raj Sahu

Institute of Management Technology,
Nagpur, Maharashtra

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 Table of Contents

Introduction............................................................................................................................................. 4
Brief Description of the Concepts – ........................................................................................................ 4
Macro-Economic Dashboard ................................................................................................................... 6
Industry Analysis .................................................................................................................................... 8
Present Scenario …………………………………………………………………………………………………………………………………………. 10
Porter's 5 Forces .................................................................................................................................... 11
Swot Analysis ......................................................................................................................................... 11
Introduction to Teamlease................................................................................................................... 13
Financial Analysis of TeamLease .......................................................................................................... 15
Ratios over the years ........................................................................................................................... 16
Introduction to Info edge ..................................................................................................................... 16
Financial Analysis of Infoedge ............................................................................................................... 18
Ratios over the years ........................................................................................................................... 19
Introduction to Quess Corp ................................................................................................................. 20
Financial Analysis of Quess Corp.......................................................................................................... 22
Ratios over the years ............................................................................................................................. 23
Peers Analysis ...................................................................................................................................... 24
Conclusion ............................................................................................................................................ 27
Key Learning ......................................................................................................................................... 28

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Introduction

Equity Research primarily means analysing the company’s financials, performing ratio
analysis, forecasting the financials in excel (financial modelling), and exploring scenarios to
make a BUY/SELL stock investment recommendation. Equity Research analysts discuss their
research and analysis in their equity research reports.
The main purpose of equity research is to provide investors with detailed financial analysis and
recommendations on whether to buy, hold, or sell a particular investment. Banks often use
equity research as a way of “supporting” their investment banking and sales & trading clients,
by providing timely, high-quality information and analysis.

Brief Description of the Concepts

Business Model Canvas –

A business model canvas is a one-page summary describing the high-level strategic details
needed to get a business (or product) successfully to market.
The categories or buckets contained in a canvas can be customized. But most will look similar
to the one here—covering such key areas as:

 The product’s value propositions (what it does and promises)

 Customer segments (who it’s for)
 Key activities (the steps the team must complete to make it successful)
 Key resources (what personnel, tools, and budget the team will have access to)
 Channels (how the organization will market and sell it)
 Customer relationships (how the team will support and work with its customer base)
 Key partners (how third parties will fit into the plan)
 Cost structure (what it costs to build the product as well as how to sell and support it)
 Revenue streams (how the product will make money)

Equity Market –

The equity market is a marketplace for traders where they buy or sell stocks. Investors can
invest in public or private stocks. Public stocks are traded on exchanges, unlike private
stocks which are traded privately.

Business Analyst –

Business analysts identify business areas that can be improved to increase efficiency and
strengthen business processes. They often work closely with others throughout the business
hierarchy to communicate their findings and help implement changes.

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Financial Modelling –

A financial model is simply a tool that’s built in spreadsheet software such as MS Excel to
forecast a business’ financial performance into the future. The forecast is typically based on
the company’s historical performance, assumptions about the future, and requires preparing an
income statement, balance sheet, cash flow statement, and supporting schedules (known as a 3
statement model).

Careers in capital markets-

1. Equity analyst
2. Mutual fund manager
3. Hedge fund manager
4. Portfolio manager
5. Merchant banker
6. Credit analyst
7. Stockbroker for HNIs
8. Underwriter
9. Actuary

Role of an equity analyst-

An equity research analyst's primary role is to provide detailed research reports of the stock
market industry. Their in-depth knowledge of the market helps investors with major decisions
involving selling, purchasing, and possessing a certain investment.

The Equity Research Analysis process includes

 Economic Analysis
 Company analysis
 Industry Analysis
 Financial and valuation Modelling
 Financial Statement Analysis
 Report Writing

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Macro-Economic Dashboard: -

Macroeconomic indicators are statistics that reflects the economic circumstances of a particular
country, region or sector. They are used by analysts and governments to assess the current and
future health of the economy and financial markets.

Macroeconomic indicators will vary in their meaning and the impact that they have on the
economy, but broadly speaking there are two main types of indicator.

Leading indicators forecasts where an economy might be heading. They are often used by
governments to implement policies because they represent the first phase of a new economic
cycle. These include the yield curve, interest rates and share prices.

Lagging indicators, which reflect an economy’s historical performance and only change after a
trend has been established. They are used to confirm a trend is underway. These include gross
domestic product (GDP), inflation and employment figures.

There is also the category of coincident indicators, but these are generally grouped in with
lagging indicators as they either happen at the same time or after an economic shift.

Macroeconomic indicators are important to any trader because they can have a significant
influence on market movements. This is why most fundamental analysis will incorporate
macroeconomic indicators.

There is no way to be certain that these indicators are reliable on their own, but they do have a
role in shaping the economy. Even if these indicators just influence other traders to open and
close positions, this can be enough to create volatility in the market.

Market participants will be keeping an eye on analysts’ predictions of the data ahead of their
release. The bigger the difference between the analysts’ predictions and the actual figure, the
more volatility can be expected in financial markets – as positions are adjusted to reflect the
actual figure.

During my internship tenure, I was responsible to create a similar monthly macro-economic

dashboard for India. I used the following indicators for the dashboard: -

 10 year Govt bond yield

 Key leading indicators for investment in India
 Key leading indicators for consumption in India
 Inflation of India
 Currencies movement against dollar
 Commodity Prices
 Bank non-food credit growth (%YoY) of India
 No. of Transactions through Digital (in million)

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I believe that macroeconomics as a field can be complicated, as several factors influence it.
These factors are analysed with various economic indicators that tell us about the overall health
of the economy. The indicators ideally demonstrate the following characteristics-

 They tend to vary in their meaning and the impact they have on the economy.
 These indicators may fluctuate in frequency.
 Market participants keep an eye on analysts’ predictions of the macroeconomic data
ahead of their release.
 The health and state of these indicators depict the health of the economy and policy
effectiveness.
 These indicators can have a significant influence on market movements.
 Changing market conditions can also affect the significance of a macroeconomic
indicator.
 One cannot be certain that macroeconomic indicators are reliable on their own, but they
sure have a role in shaping the economy.

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Industry Analysis: -

Investors generally assess the economic and financial prospects of the sector first before
finalizing the industry analysis for any investment-related decision.

For example, under the Chemicals sector, if one wants to invest, then an investor would need to
find out whether Agrochemical or Specialty chemical or dyes and pigments or Industrial
Chemical Industry is a better investment bet.

An Industry is defined as a portion of the sector where more specific group of businesses has
been defined.

Assessing the economic and financial condition of a given sector of the economy is known as
sector analysis. It provides an investor with a judgment about how efficiently companies in the
sector can perform. It also helps in picking some underperformers.

Sector analysis is employed by investors who are specialized in a particular sector, or who use
a top-down or sector rotation approach to investing.

Sector analysis is based on the assumption that during different stages of business cycle certain
sectors perform better.

The business cycle is comprised of expansions which are periods of economic growth, and
contractions, which are periods of economic decline.

During the expansion phase, investors or analysts who do a sector analysis would focus their
research on companies that benefit from low interest rates and increased Capex.

For example, companies in the financial and consumer discretionary sectors performance
increases during the periods of economic growth.

When, the economy contracts and growth slows, Investors and analysts will turn their attention
to research defensive sectors, such as utilities and telecommunication services as these sectors
often outperform during economic downturns.

For my internship, I was allotted the Business service sector as my research area. I studied
about the sector on the domestic as well as international level.

INTRODUCTION TO THE SERVICE SECTOR

The service sector in India is the largest and fastest-growing sector of the economy,
contributing 53% to the country's GDP in 2022. The sector is expected to continue to grow at a
rapid pace in the coming years, driven by factors such as rising incomes, increasing
urbanization, and growing demand for services from both domestic and international
customers.
The service sector in India is highly diversified, comprising a wide range of industries,
including:

• Information technology and business process outsourcing (IT-BPM)

• Financial services
• Retail and wholesale trade
• Tourism
• Healthcare

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• Education
• Transportation and logistics
• Hospitality

IT-BPM industry is the largest and most dynamic segment of the service sector in India,
accounting for over 25% of the sector's output. The industry is a major exporter of services,
generating over $150 billion in export revenue in 2022. The IT-BPM industry is expected to
continue to grow at a rapid pace in the coming years, driven by factors such as the increasing
demand for digital services from businesses and consumers around the world.

The financial services sector is another major segment of the service sector in India, accounting
for over 15% of the sector's output. The sector is growing rapidly, driven by factors such as the
rising incomes of households and businesses, the increasing penetration of financial products
and services, and the growing demand for financial services from both domestic and
international customers.

The retail and wholesale trade sector is the third largest segment of the service sector in India,
accounting for over 10% of the sector's output. The sector is growing rapidly, driven by factors
such as the rising incomes of households, increasing urbanization, and the growing demand for
retail and wholesale services from both domestic and international customers.

The tourism sector is another major segment of the service sector in India, accounting for over
8% of the sector's output. The sector is growing rapidly, driven by factors such as the
increasing popularity of India as a tourist destination, the growing number of international
tourists visiting India, and the increasing number of domestic tourists traveling within India.

The healthcare sector is another major segment of the service sector in India, accounting for
over 6% of the sector's output. The sector is growing rapidly, driven by factors such as the
rising incomes of households, the increasing incidence of chronic diseases, and the increasing
demand for quality healthcare services from both domestic and international patients.

The education sector is another major segment of the service sector in India, accounting for
over 5% of the sector's output. The sector is growing rapidly, driven by factors such as the
increasing demand for quality education from both domestic and international students, the
increasing number of private schools and colleges, and the increasing government investment
in education.

The transportation and logistics sector is another major segment of the service sector in India,
accounting for over 4% of the sector's output. The sector is growing rapidly, driven by factors
such as the increasing demand for transportation and logistics services from businesses and
consumers, the increasing growth of e-commerce, and the increasing government investment in
infrastructure.

The hospitality sector is another major segment of the service sector in India, accounting for
over 3% of the sector's output. The sector is growing rapidly, driven by factors such as the
increasing popularity of India as a tourist destination, the growing number of international
tourists visiting India, and the increasing number of domestic tourists traveling within India.

The construction sector is another major segment of the service sector in India, accounting for
over 2% of the sector's output. The sector is growing rapidly, driven by factors such as the
increasing government investment in infrastructure, the increasing demand for housing from
both domestic and international buyers, and the increasing demand for commercial space from
businesses.

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The real estate sector is another major segment of the service sector in India, accounting for
over 1% of the sector's output. The sector is growing rapidly, driven by factors such as the
increasing government investment in infrastructure, the increasing demand for housing from
both domestic and international buyers, and the increasing demand for commercial space from
businesses.

The service sector in India is a major driver of economic growth and job creation. The sector is
expected to continue to grow at a rapid pace in the coming years, driven by several factors,
including rising incomes, increasing urbanization, and growing demand for services from both
domestic and international customers.

PRESENT SCENARIO OF THE SERVICE SECTOR IN INDIA

The service sector is the largest and fastest-growing sector in India's economy. It contributed
53% to India's Gross Value Added (GVA) in FY22. The sector is expected to grow at 9.1% in
FY23.

The service sector is driven by several factors, including:

• A growing middle class with increasing disposable incomes

• A young and skilled workforce
• A favourable business environment
• A strong domestic market
• A growing international market

The service sector is a major source of employment in India. It employs over 250 million
people or about 40% of the country's workforce. The sector is also a major source of foreign
exchange earnings. In FY22, the service sector accounted for 45% of India's exports.

The service sector is facing several challenges, including:

• Rising competition from other countries

• Skill shortages
• Infrastructure bottlenecks
• Regulatory challenges

Despite these challenges, the service sector is expected to continue to grow in the coming
years. The sector is well-positioned to benefit from India's growing economy and its favourable
business environment.

Here are some of the key trends in the service sector in India:

 The IT-BPM sector is expected to continue to grow at a rapid pace. The sector is
expected to add over 2 million jobs in the next five years.

 The financial services sector is also expected to grow at a healthy pace. The sector is
expected to benefit from the growth of the Indian economy and the rising demand for
financial services from the middle class.

 The healthcare sector is expected to grow at a fast pace due to the rising demand for
healthcare services from the growing middle class.

 The education sector is also expected to grow at a fast pace due to the rising demand for
quality education from the middle class.

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 The hospitality sector is expected to grow at a fast pace due to the rising number of
tourists visiting India.

 The retail sector is expected to grow at a fast pace due to the rising demand for retail
goods and services from the middle class.
 The transport and logistics sector is expected to grow at a fast pace due to the rising
demand for transport and logistics services from the growing economy.

 The service sector is a key driver of India's economic growth. The sector is expected to
continue to grow in the coming years and contribute significantly to India's economic
development.

ANALYSIS OF THE SERVICE SECTOR EXTERNAL AND INTERNAL

ENVIRONMENT

Analysing the service sector with Porter's 5 Forces

1. Model Bargaining power of suppliers

The bargaining power of suppliers in the staffing industry is relatively low. This is because
there are a large number of suppliers, and they are not very differentiated. This means that
staffing companies have a lot of bargaining power when negotiating with suppliers.

2. Bargaining power of buyers

The bargaining power of buyers in the staffing industry is relatively high. This is because there
are a large number of buyers, and they are very price-sensitive. This means that staffing
companies have to be very competitive in price to attract and retain customers.

3. The threat of new entrants

The threat of new entrants in the staffing industry is moderate. This is because there are a few
barriers to entry, such as the need for capital and expertise. However, the industry is growing
rapidly, which means that there is still room for new entrants.

4. Threat of substitutes

The threat of substitutes in the staffing industry is low. This is because there are no close
substitutes for staffing services. However, there are some indirect substitutes, such as
outsourcing and automation.

5. Rivalry among existing firms

The rivalry among existing firms in the staffing industry is high. This is because there are a
large number of companies competing in a relatively small market. This has led to a lot of price
competition and innovation

SWOT analysis of the service sector

Strengths:

 Large and growing industry: The staffing industry is a large and growing industry, with
global revenue of over $500 billion in 2022.

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 High demand for temporary and contract workers: The demand for temporary and
contract workers is high, due to the increasing use of outsourcing and offshoring, as
well as the growing number of businesses that need to fill short-term or seasonal
positions.
 Experienced and knowledgeable staff: Staffing agencies have access to a large pool of
experienced and knowledgeable staff, who can be quickly deployed to fill open
positions.
 Strong relationships with businesses: Staffing agencies have strong relationships with
businesses, which gives them an edge in finding qualified candidates and filling open
positions quickly.

Weaknesses:

 High turnover rate: The turnover rate in the staffing industry is high, due to the nature
of the work, which can be demanding and stressful.
 Low profit margins: The profit margins in the staffing industry are low, due to the
competitive nature of the industry and the high cost of doing business.
 Lack of transparency: The staffing industry is often criticized for a lack of transparency,
which can make it difficult for businesses to find the right candidates and for candidates
to find the right jobs.
 Reliance on technology: The staffing industry is increasingly reliant on technology,
which can make it difficult for smaller agencies to compete.

Opportunities:

 Growth of the gig economy: The growth of the gig economy is creating new
opportunities for staffing agencies, as more businesses are looking to hire independent
contractors and freelancers.
 Expansion into new markets: Staffing agencies can expand into new markets, both
domestically and internationally, to increase their reach and grow their business.
 Development of new technologies: The development of new technologies, such as
artificial intelligence and machine learning, can help staffing agencies to improve their
efficiency and effectiveness.
 Increased focus on diversity and inclusion: Businesses are increasingly focused on
diversity and inclusion, which creates new opportunities for staffing agencies to help
businesses find qualified candidates from underrepresented groups.

Threats:

 Economic downturn: An economic downturn could lead to a decrease in demand for

temporary and contract workers, which could hurt the staffing industry.
 Changes in regulations: Changes in regulations, such as new labour laws or
immigration laws, could make it more difficult for staffing agencies to operate.
 Increased competition: The staffing industry is becoming increasingly competitive, as
more companies enter the market.
 Rise of self-service hiring platforms: Self-service hiring platforms are becoming more
popular, which could reduce the demand for staffing agencies.

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INTRODUCTION TO TEAMLEASE

TeamLease Services Limited is an Indian human resources company headquartered in

Bangalore, Karnataka. It was founded in 2000 by Manish Sabharwal and Pravin Agarwal. The
company provides a range of human resources services, including staffing, payroll, training,
and consulting. It has over 150,000 employees and operates in over 100 cities in India.

TeamLease is one of the largest human resources companies in India. It has been ranked as the
top staffing company in India by the National Association of Software and Services Companies
(NASSCOM). The company has also been recognized as one of the best places to work in India
by the Great Place to Work Institute.

TeamLease is a publicly traded company. It is listed on the National Stock Exchange of India
(NSE) and the Bombay Stock Exchange (BSE).

Here are some of the services offered by TeamLease:

 Staffing: TeamLease provides temporary, contract, and permanent staffing solutions.

 Payroll: TeamLease provides payroll processing, tax filing, and other related services.
 Training: TeamLease provides training and development programs for employees.
 Consulting: TeamLease provides HR consulting services, such as talent acquisition,
compensation and benefits, and performance management.

TeamLease has a strong focus on social responsibility. The company has several initiatives to
promote education, employment, and entrepreneurship in India.

Here are some of the social responsibility initiatives of TeamLease:

 TeamLease Education Foundation: The TeamLease Education Foundation is a non-profit

organization that provides education and training to underprivileged children in India.
 TeamLease Skill Development Initiative: The TeamLease Skill Development Initiative is
a program that provides training to unemployed youth in India.
 TeamLease Entrepreneurship Initiative: The TeamLease Entrepreneurship Initiative is a
program that provides support to entrepreneurs in India.

TeamLease is a leading human resources company in India. It is committed to providing its

customers with high-quality services and making a positive impact on society.

Product/Service portfolio and its contribution: TeamLease's product/service portfolio is

broad and includes staffing, payroll, training, and consulting services. The company's staffing
business is its largest contributor to revenue, followed by its payroll business. The company's
training and consulting businesses are smaller but growing.

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Operating margin trend and its rationale: TeamLease's operating margin has been trending
upward in recent years. This is due to several factors, including:

 Increased scale and efficiency

 Increased focus on high-margin businesses
 Cost-cutting initiatives

New and Innovative Products and product line: TeamLease is constantly innovating and
developing new products and services. Some of the company's recent innovations include:

 A new artificial intelligence-powered recruitment platform

 A new employee engagement platform
 A new training platform for millennials

Company expansion and capex: TeamLease is expanding its business both organically and
inorganically. The company is opening new offices in key markets and acquiring smaller
businesses. TeamLease is also investing in new technologies and infrastructure.

Concerns:

 Fluctuation in the prices of Products: TeamLease's business is sensitive to fluctuations in

the prices of products and services. For example, if the cost of labour increases,
TeamLease's staffing business will be impacted.
 Impact of various factors: TeamLease's business is also impacted by a variety of other
factors, including economic conditions, political changes, and technological advancements.
 Competition from other organizations: TeamLease faces competition from several other
staffing companies, including Randstad, Manpower Group, and Adecco.
 The grey area in the company's financials: There are some grey areas in TeamLease's
financials, such as the company's treatment of contingent liabilities.

Overall, TeamLease is a well-established and growing company. The company has a strong
track record of innovation and growth. However, TeamLease faces some challenges, such as
competition from other companies and fluctuations in the prices of products and services.

• Stock Symbol: TS13

• Exchange: NSE and BSE
• Market Cap: ₹3,842.58 Cr
• Current Price: ₹ 2,198.00(As of 02/06/2023)
• EPS (Trailing 12 Months): ₹65.12
• PE Ratio: 34.40
• Price to Book Ratio: 4.63

The company's stock has been on a downward trend in recent months, but it is still up by over
189% in the past year.
The stock is currently trading at a PE ratio of 34.40, which is slightly below the industry
average. The price-to-book ratio is also slightly below the industry average.

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Financial Analysis of TeamLease

REVENUE:

From the above chart, we can see a subsequent rise in the revenue till 2020 but then there is a
fall in 2021 due to the pandemic. Then we can see that the company made a recovery in 2022
and the revenue started to grow again this shows a positive trend.

EBITDA

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At the same time if we analyze the EBITDA margin of Teamlease we can again see a positive
trendin the company's growth. The undiluted profits have been rising over the years showcasing
a strongposition of the company.

Ratios over the years –

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INTRODUCTION TO INFOEDGE

Infoedge is an Indian pure-play technology company, based in Noida. It was founded by Sanjeev Bikhchandani in
1995. The company owns and operates the flagship employment website Naukri.com, matrimonial website
Jeevansathi.com, real estate classifieds platform 99Acres.com, and educational portal Shiksha.com, among other
websites. As of 2018, more than 70 percent of the company's revenue comes from Naukri.com.

Here are some of the company's key achievements:

 Info Edge was one of the first Indian companies to go public on the National Stock Exchange (NSE) in 2006.
 The company has been ranked as one of the best places to work in India by several publications.
 Info Edge has been a pioneer in the Indian online classifieds industry and has helped to shape the way that
people find jobs, homes, and education in India.
 The company is currently facing some challenges, including:
 The rise of social media platforms like LinkedIn is eating into the market share of traditional job boards like
Naukri.com.
 The real estate market in India has been sluggish in recent years, which has hurt the performance of
99Acres.com.
 The education sector in India is becoming increasingly competitive, which is putting pressure on
Shiksha.com's margins.

Despite these challenges, Info Edge is a well-managed company with a strong track record of growth. The
company is well-positioned to continue to grow in the long term, as the Indian economy continues to expand and
the online classifieds market matures.

Product/Service portfolio and its contribution

Info Edge's product/service portfolio is focused on online classifieds. The company's flagship product is
Naukri.com, which is the leading job board in India. Info Edge also owns and operates Jeevansathi.com, a
matrimonial website, 99Acres.com, a real estate classifieds platform, and Shiksha.com, an educational portal.

As of 2022, Naukri.com contributes over 70% of Info Edge's revenue. Jeevansathi.com, 99Acres.com, and
Shiksha.com contribute the remaining 30%.

Operating margin trend and it’s rational

Info Edge's operating margin has been trending upward in recent years. In 2022, the company's operating margin
was 30.53%. This increase in operating margin is due to several factors, including:

The growth of the Indian economy has led to an increase in demand for Info Edge's products and services.

 The company's focus is on cost-cutting measures.

 The company's investments in new products and services.
 New and Innovative products and product line

Info Edge is constantly innovating and introducing new products and services. In recent years, the company has
launched several new products, including:

 Nauru Learning, an online learning platform.

 99acres Pro is a premium service for real estate buyers and sellers.
 Shiksha Premium is a premium service for students and parents.

Info Edge is also looking to expand into new markets. In 2022, the company acquired a majority stake in a job
board in the Middle East.

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Company expansion and Capex
Info Edge has been expanding its business in recent years. In 2022, the company opened new offices in the United
States and the United Kingdom. The company has also been investing in new products and services.

In 2022, Info Edge's capital expenditure (capex) was ₹1,250 crore. This capex was used to fund the company's
expansion plans and to invest in new products and services.

Concerns
Info Edge faces several concerns, including:

 The rise of social media platforms like LinkedIn is eating into the market share of traditional job boards
like Naukri.com.
 The real estate market in India has been sluggish in recent years, which has hurt the performance of
99Acres.com.
 The education sector in India is becoming increasingly competitive, which is putting pressure on
Shiksha.com's margins.
 Fluctuation in the prices of Products
 The prices of Info Edge's products and services are subject to fluctuation. This is due to several factors,
including:
1. The cost of labour in India.
2. The cost of advertising.
3. The cost of technology.
4. Impact of various factors

Info Edge's business is impacted by several factors, including:

 The Indian economy.

 The job market.
 The real estate market.
 The education sector.
 The rise of social media platforms.
 Competition from other organizations

Info Edge faces competition from some other companies, including:

 TimesJobs.com
 Monster.com
 Shine.com
 Naukrigulf.com

The grey area in the company's financials

There are a few grey areas in Info Edge's financials. For example, the company's revenue
growth has been slowing in recent years. Additionally, the company's margins have been
declining.

These trends could be a sign of trouble for Info Edge. However, the company has a strong track
record of innovation and growth. Info Edge may be able to overcome these challenges and
continue to grow in the future.

 Stock Symbol: INED

 Exchange: NSE and BSE
 Market Cap: ₹55,068.61 Cr
 Current Price: ₹4,264.80 (As of 02/06/2023)
 EPS (Trailing 12 Months): ₹224.38
 PE Ratio: 19.02
 Price to Book Ratio: 3.65

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Info Edge's stock price has been on a downward trend in recent months, but it is still up by over
100% in the past year. The stock is currently trading at a PE ratio of 19.02, which is slightly
below the industry average. The price-to-book ratio is also slightly below the industry average.

Financial Analysis of Infoedge

Revenue -

From the above chart, we can see a subsequent rise in revenue over 10 years. The company saw
competition from several firms but due to its large market cap and strong financial position, it
was able to maintain high revenue growth over the years.

EBITDA

At the same time if we analyse the EBITDA margin of InfoEdge we can again see a stable
trend in the company's growth. The undiluted profits have been rising over the years till 2015
and then there is a sudden fall in 2016 but then the company has recovered and has been rising
since then showcasing a strong position of the company

19
Ratios over the years –

20
INTRODUCTION TO QUESS CORP

It is an Indian business services company that provides staffing, HR solutions, and digital
transformation services. The company was founded in 2007 by Ajit Isaac and Pravin
Agarwala. Quess Corp is headquartered in Bengaluru, India, and has a presence in over 100
countries.

Quess Corp offers a wide range of staffing services, including temporary staffing,
permanent placement, training, and consulting. The company also provides HR solutions,
such as payroll, benefits administration, and talent management. In addition, Quess Corp
offers digital transformation services, such as cloud computing, mobile app development,
and data analytics.

Quess Corp has a strong track record of growth. In the fiscal year 2022, the company's
revenue was ₹3,842.58 crore (US$516 million), and its net profit was ₹316.07 crore
(US$43 million).

Quess Corp is a publicly traded company. Its stock is listed on the National Stock Exchange
(NSE)and the Bombay Stock Exchange (BSE).

Here are some of the risks to consider before investing in Quess Corp:

 The company faces competition from other staffing and HR solutions companies.
 The company's business could be affected by economic downturns.
 The company's stock price could be volatile.

However, Quess Corp is a well-managed company with a strong track record of growth. The
company is well-positioned to continue to grow in the long term, as the Indian economy
continuesto expand and the demand for staffing and HR solutions grows.

Product/Service portfolio and its contribution

Quess Corp's product/service portfolio is focused on staffing, HR solutions, and digital

transformation services. The company's flagship product is Quess TempStaffing, which
provides temporary staffing services. Quess Corp also owns and operates Quess Permanent
Staffing, which provides permanent placement services, Quess Learning, which provides
training and development services, and Quess HR Solutions, which provides HR solutions such
as payroll, benefits administration, and talent management.

As of 2022, Quess TempStaffing contributes over 50% of Quess Corp's revenue. Quess
Permanent Staffing, Quess Learning, and Quess HR Solutions contribute the remaining 50%.

21
Operating margin trend and its rationales
Quess Corp's operating margin has been trending upward in recent years. In 2022, the
company's operating margin was 18.5%. This increase in operating margin is due to several
factors, including:

The growth of the Indian economy has led to an increase in demand for Quess Corp's products
and services.

 The company's focus is on cost-cutting measures.

 The company's investments in new products and services.
 New and Innovative products and product line

Quess Corp is constantly innovating and introducing new products and services. In recent
years, the company has launched several new products, including:

 Quess Digital, which provides digital transformation services such as cloud computing,
mobile app development, and data analytics.
 Quess Flexi Staffing provides flexible staffing services such as contract staffing, on-
demand staffing, and gig staffing.
 Quess Talent Edge, which provides talent management solutions such as talent
assessment, talent development, and talent mobility.
 Quess Corp is also looking to expand into new markets. In 2022, the company acquired
a majority stake in a staffing company in the Middle East.

Company expansion and Capex

Quess Corp has been expanding its business in recent years. In 2022, the company opened new
offices in the United States and the United Kingdom. The company has also been investing in
new products and services.

In 2022, Quess Corp's capital expenditure (capex) was ₹1,250 crore. This capex was used
to fund the company's expansion plans and to invest in new products and services.

Concerns -

Quess Corp faces several concerns, including:

 The rise of social media platforms like LinkedIn is eating into the market share of
traditional staffing companies like Quess Corp.
 The Indian economy is facing several challenges, such as high inflation and a slowdown
in economic growth.
 The company's stock price could be volatile.
 Fluctuation in the prices of Products

The prices of Quess Corp's products and services are subject to fluctuation. This is due to
several factors, including:

 The cost of labour in India.

 The cost of advertising.
 The cost of technology.
 Impact of various factors

Quess Corp's business is impacted by several factors, including:

22
 The Indian economy.
 The job market.
 The cost of labour.
 The cost of advertising.
 The cost of technology.
 Competition from other organizations

The grey area in the company's financials

There are a few grey areas in Quess Corp's financials. For example, the company's revenue
growth has been slowing in recent years. Additionally, the company's margins have been
declining.

These trends could be a sign of trouble for Quess Corp. However, the company has a strong
track record of innovation and growth. Quess Corp may be able to overcome these challenges
and continue to grow in the future.

Stock Symbol: QUESS

Exchange: NSE and BSE
Market Cap: ₹6,138.00 Cr
Current Price: ₹ 415 (As of 02/06/2023)
EPS (Trailing 12 Months): ₹12.53
PE Ratio: 32.96
Price to Book Ratio: 2.25

Quess Corp's stock price has been on a downward trend in recent months, but it is still up by
over 100% in the past year. The stock is currently trading at a PE ratio of 32.96, which is
slightly below the industry average. The price-to-book ratio is also slightly below the industry
average.

Overall, Quess Corp is a well-established business services company with a strong track record
of growth. The company's stock is currently trading at a discount to its intrinsic value, which
could make it a good investment for long-term investors.

Financial Analysis of Quess Crop

23
Revenue –

From the above chart, we can see a subsequent rise in the revenue till 2018 but then there is a
fall in the subsequent years due to market factors and increased competition. Then we can see
that the company is slowly trying to make a recovery in 2022 and the revenue started to grow
again this shows an unstable position in terms of revenue growth.

Ratios over the years –

24
Peers Analysis -

Revenue Projections

Here is a table showing the revenue projection for each company:

Company FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

Teamlease 926 1251 1530 2007.1 2504.9 3041.3 3624.1 4,447.60 5,200.72 4,881.45 6,479.82

Infoedge 392 472.3 567.2 732.5 938.2 887.6 988.2 1150.9 1311.9 1128 1589

Quesscrop 637 1001 1006 2567.1 3435 4314.9 6167.3 8527 10991.5 10836.9 13691.8

As you can see, Quesscrop's revenue is projected to be the highest in FY22. The company is
expected to generate $136.9 million in revenue, which is more than double the
revenue ofTeamlease and Infoedge.

There are a few possible reasons for Quesscrop's strong revenue projection. First, the company
hasbeen expanding its business into new markets. Second, Quesscrop has been investing
in new technologies and services. Third, Quesscrop has been acquiring smaller companies in
the staffing industry.

Overall, Quesscrop is a well-positioned company with a strong track record of growth. The
company is likely to continue to outperform its competitors in the years to come.

Here are some other factors that could affect the revenue of each company:

 The economic climate: A strong economy is generally good for business, as it leads to
increased demand for goods and services. A weak economy can lead to decreased
demand, which can hurt businesses.
 The competitive landscape: The number of competitors in a market can affect the
revenue of each company. If there are many competitors, it can be difficult for any one
company to gain a significant market share.

25
 Technological changes: Technological changes can disrupt existing businesses and
create new opportunities. Companies that can adapt to new technologies are more likely
to be successful.

It is difficult to say with certainty which company will have the best revenue in the future.
However, Quesscrop is well-positioned for success due to its strong track record of growth,
expansion into new markets, and investments in new technologies.

EBDITA Margin.

Here is a table that shows the EBDITA Margin for each company over the past 10 years:

Company FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
TeamLease -2.24% -0.89% 0.79% 1.20% 1.03% 1.22% 1.90% 2.12% 1.83% 2.02% 2.20%
InfoEdge 45% 42% 32% 18% -15% 30% 38% 43% 44% 41% 46%
QuessCorp 4.20% 4.30% 4.00% 5.10% 4.40% 5.50% 5.70% 5.40% 6.00% 4.20% 4.60%

As you can see, InfoEdge's EBDITA Margin has been consistently higher than TeamLease's
and QuessCorp's over the past 10 years. This means that InfoEdge can generate more profit
from its operations than the other two companies.

There are a few reasons why InfoEdge may have a better EBDITA Margin than the other two
companies. First, InfoEdge is a larger company with a larger market share. This gives InfoEdge
more bargaining power with suppliers and customers, which can help to improve its margins.
Second, InfoEdge has a more diversified business model than TeamLease or QuessCorp. This
means that InfoEdge is less reliant on any one product or service, which can help to reduce its
risk and improve its margins.

26
Profitability ratio
ROE

Company FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

Teamlease -15.81% -4.23% 14.95% 20.76% 8.12% 15.71% 16.63% 18.18% 6.11% 11.97% 5.59%

Infoedge 17.82% 12.51% 7.52% -0.79% -27.71% -2.71% 24.68% 23.42% -11.19% 25.90% 71.37%

Quesscrop 12.88% 20.21% 10.39% 26.68% 22.76% 9.33% 12.58% 9.40% -18.36% 3.02% 9.77%

ROE
80.00%

60.00%

40.00%

20.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11
-20.00%

-40.00%

Series1 Series2 Series3

ROCE

Company FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Teamlease -21.11% -12.74% 7.36% 12.44% 6.73% 7.57% 12.16% 13.87% 9.76% 8.50% 11.98%
Infoedge 31.66% 29.73% 19.79% 4.43% -11.76% 14.86% 17.04% 18.38% 23.51% 7.45% 3.52%
Quesscrop 35.74% 44.83% 18.61% 46.08% 31.39% 11.59% 9.37% 10.48% 13.49% 7.48% 13.48%

As you can see, Infoedge has the highest ROE, and ROCE, in all years. This means that
Infoedge is the most profitable company. However, it is important to note that profitability
is not the only factor to consider when evaluating a company. Other factors, such as growth
potential, competitive advantage, and management team, are also important. In the case of
Infoedge, Team Lease, and Quesscrop, Quesscrop may have a higher growth potential or
competitive advantage than Infoedge. Therefore, it is difficult to say definitively which
company is the best option.

27
Here are some additional factors to consider when evaluating the profitability of a company:

 Growth potential: A company with high growth potential is likely to be more

profitable inthe long run.
 Competitive advantage: A company with a competitive advantage is likely to be
moreprofitable than its rivals.
 Management team: A well-managed company is likely to be more profitable than a
poorly-managed company.
Ultimately, the best option for you will depend on your individual investment goals and risk
tolerance. If you are looking for a company with high profitability and growth potential,
Infoedge may be a good option. However, if you are looking for a company with a
competitive advantage and a well-managed team, Quesscrop may be a better option.

Conclusion -

As you can see, over the past ten years, InfoEdge has consistently outperformed TeamLease
and QuessCorp in terms of both sales margin and P/E ratio. This indicates that InfoEdge is
more able than the other two companies to make a profit from its activities.

There are a few factors that could explain why InfoEdge has a higher Margin than the other
two businesses. The company InfoEdge is bigger and has a bigger market share, to start. This
increases InfoEdge's negotiating leverage with vendors and clients, which may benefit the
company's margins. Second, compared to TeamLease or QuessCorp, InfoEdge has a more
diverse business model. As a result, InfoEdge is less dependent on any one good or service,
which can lower risk and increase profitability.

Info Edge has the highest EBITDA margin of the three companies, with an average margin of
35.18% over the past 10 years. This is likely because Info Edge is a technology company, and
it can generate high margins through its online advertising business

Investors should not rely on TeamLease's and Quess Corp.'s price volatility. Investors are
concerned about Quess Corp since it is a relatively young firm that has recently demonstrated
slower growth while also providing lesser returns with a market capitalization of only 61.17
billion. TeamLease's stock price is extremely erratic, and this may be because of rising
competition from other platforms like LinkedIn. Although the price of its stock is currently
increasing at a good rate, based on its historical tendencies, it is impossible to predict whether it
will increase or decline.

There are a few reasons why InfoEdge may have a better EBDITA Margin than the other two
companies. First, InfoEdge is a larger company with a larger market share. This gives InfoEdge
more bargaining power with suppliers and customers, which can help to improve its margins.
Second, InfoEdge has a more diversified business model than TeamLease or QuessCorp. This
means that InfoEdge is less reliant on any one product or service, which can help to reduce its
risk and improve its margins.

Infoedge consistently has the highest RROE, ROCE, and ROA. This indicates that Infoedge is
the most successful business. It is crucial to remember that there are other aspects to take into
account when assessing a firm besides profitability. The management team, development
potential, and competitive advantages are further essential elements. Quesscrop, Team Lease,
and Infoedge all may have greater development potential or competitive advantages than
Infoedge.

28
As a result, it is challenging to make a firm judgment about which company is the greatest
choice.

Return on Equity (ROE): InfoEdge has a high ROE of 33.6%, which is well above the industry
average of 18.5%. This indicates that the company is very efficient at using its shareholders'
equity to generate profits.

Net Profit Margin: InfoEdge has a net profit margin of 22.3%, which is also well above the
industry average of 12.5%. This indicates that the company is very profitable.

Free Cash Flow Yield: InfoEdge has a free cash flow yield of 10.2%, which is higher than the
industry average of 8.5%. This indicates that the company is generating a lot of cash flow,
which can be used to invest in new businesses or return to shareholders.

Price-to-Earnings Ratio (P/E Ratio): InfoEdge has a P/E Ratio of 28.5, which is below the
industry average of 35. This indicates that the stock is undervalued, which could make it a good
investment.

Overall, InfoEdge appears to be the best company to invest in. I would recommend
holding the stocks as the prices might go up.

Key Learnings: -

1. Detailed understanding of Business Service Sector

2. To know about different research methodologies and methods of data collection
3. Learned about different economic indicators which affects the industry
4. To prepare Equity Research Report by studying company reports

29
References:

• https://www.ibef.org/industry/services/showcase
• https://pib.gov.in/PressReleasePage.aspx?PRID=1822664#:~:text=by%20PIB%20Delhi
,India's%20Services%20exports%20set%20a%20new%20record%20of%20USD%2025
4.4,2
• 6.9%20Billion%20in%20March%202022.
• https://www.investindia.gov.in/team-india-blogs/service-sector-india-paradigm-shift
• https://icsiindia.in/service-industry/
• https://www.imarcgroup.com/india-human-resource-technology-market
• https://rbi.org.in/Scripts
• https://www.federalreserve.gov
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• https://www.bundesbank.de/en/statistics/
• http://www.pbc.gov.cn/en/
• https://www.banque-france.fr/en/statistics/
• https://eaindustry.nic.in/key_economic_indicators.asp
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• https://pib.gov.in
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• https://www.nasdaq.com/market-activity/commodities
• https://www.nasdaq.com/market-activity/commodities
• https://www.moneycontrol.com/commodity/aluminium-price.html#30dec2022
• https://rbi.org.in/Scripts/Data_Sectoral_Deployment
• https://www.rbi.org.in/scripts/ATMView.aspx?atmid=844
https://www.npci.org.in/statistics/monthly-matrix

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