About the Company:
The company is a leading business services provider in India and operates across several key segments, including Workforce Management, Operating Asset Management, and Global Technology Solutions. With a headcount near 600,000 employees and associates, the company offers a wide range of services, such as staffing, HR solutions, facilities management, and digital transformation services. The company’s operations are spread across India and internationally in regions such as Southeast Asia, the Middle East, and North America, serving over 3,000 clients globally.
Over the years, the company has cemented its leadership position in the domestic market, driven by consistent headcount growth and a strong client base. In FY24, the company achieved a notable year-on-year headcount addition of ~50,000, marking its third consecutive year of significant growth. The company’s sectoral exposure spans industries such as BFSI, retail, telecom, and IT, with a focus on delivering customized solutions that enhance client productivity. This diversified business approach, coupled with a strong revenue stream from general staffing and specialized IT services, positions the company as a crucial player in the business services sector.
Our investment interpretation :
Our investment thesis for the company is anchored around its unique position within the outsourcing theme, capitalizing on the formalization of the Indian economy. The company has consistently demonstrated its ability to manage a highly complex, operationally challenging business model, making it the market leader in its sector. As the Indian economy transitions toward formalization, this company is well-positioned to benefit from the increased demand for professional business services, driven by its leadership in staffing and outsourcing solutions.
We also identified an opportunity for value buying at a time of peak market pessimism. The company was trading at depressed valuations, despite its strong fundamentals, creating an attractive entry point for long-term investment. Confidence in the business was further solidified by strategic promoter buying, which served as a strong signal of internal confidence in the company’s future growth trajectory. These factors, coupled with its market leadership, solidify our high conviction in staying invested for the long term.
Returns:
MCap on date of Investment: INR 6,106 Crs.
MCap on date of Exit/ Today: INR 11,773 Crs.
Multiple on Invested Capital (MOIC): 1.9x
