In addition to that I believe the major reason is the disallowance of deductions under Section 80JJAA. Under this section, on every new job added, a special deduction was allowed on the employer’s, i.e. manpower companies’ profit for computing tax. Quess filed an appeal against this the results of which are expected to come before 23rd March 2023. They will continue to claim the deduction for the current year still, but if the order holds then all the deductions starting from FY16 will be rejected. Total 80JJAA claim for Quess stood at INR7b over FY16-20, and add some for FY21-23 also. Quess has made provision for only FY18 so far which is INR166mn and they are expected to make more provisions in the coming quarters.
Teamlease is also suffering in the market for the same reason, I believe.
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