Quess Corp — Q1 FY26 earnings call

Quess Corp reported a revenue of INR3,651 crores for Q1 FY26, showing a 2% year-on-year growth and flat sequential growth. EBITDA increased by 10% YoY and 4% QoQ to INR70 crores, with EBITDA margins expanding by 7 basis points QoQ to 1.9%. The adjusted Profit After Tax (PAT) stood at INR53 crores, an 8% increase YoY, translating to an adjusted EPS of INR3.5 per share. The company added nearly 2,000 associates on a net basis, bringing the total headcount to 4,61,531.

The General Staffing segment recorded a revenue of INR3,122 crores, which was flat year-on-year and marginally down quarter-on-quarter. Despite a decline in April, the segment saw a strong recovery in June with 6,500 net additions, contributing to an overall net add of 2,000 associates for the quarter. Management is optimistic about the upcoming festive season, citing an encouraging open mandate of 42,000 positions. The core-to-associate ratio, which declined to 307, is expected to reverse in the second half of the year as capacity creation translates into net joinees.

Professional Staffing delivered its strongest quarterly performance in over 15 years, with revenue growing 31% year-on-year and 11% quarter-on-quarter to INR244 crores. Segmental EBITDA increased by 48% YoY and 24% QoQ to INR25 crores, pushing the EBITDA margin to a double-digit 10.2%. This success is attributed to deeper engagements with Global Capability Centers (GCCs), which now account for 73% of segment revenues, and a strategic focus on niche and super-niche roles in emerging technologies like AI, cloud, and cybersecurity.

Quess announced the launch of 'Origint powered by Quess,' a new strategic business line aimed at assisting global enterprises in establishing, expanding, and managing high-performing capabilities across India's rapidly growing GCC ecosystem. Origint provides end-to-end services, leveraging Quess's expertise in talent acquisition and infrastructure management. Management expects this asset-light model to sustain double-digit EBITDA margins for the professional staffing segment, capitalizing on the projected growth of 700+ new GCCs in India by 2030.

The overseas business reported a stable revenue of INR284 crores, flat year-on-year and marginally down 1% sequentially. Despite visa-related challenges in Singapore, which historically was the largest contributor, the segment's EBITDA grew 12% YoY to INR17 crores (5.9% margin). This resilience was driven by strong growth in the Middle East (EBITDA up 48%), Malaysia (EBITDA up almost 100%), and the Philippines (EBITDA up 56%). Quess has also diversified by expanding into localized general staffing in Singapore to offset the professional staffing decline.

Quess is advancing its digital strategy by integrating its flagship platform, Hamara Jobs, into the Open Network for Digital Commerce (ONDC). As an anchor network participant in the work opportunity domain (ONEST), Hamara Jobs will contribute over 5 lakh verified job listings annually to the ONDC network. This integration aims to significantly boost access to trusted, transparent, and scalable job opportunities for MSMEs and blue-collar workers in Tier 2, Tier 3, and rural India, expanding Quess's reach into previously underserved markets.

The newly approved Employment-Linked Incentive (ELI) scheme is set to go live on August 1st, aiming to formalize the informal labor market and improve employee retention. However, due to the condition requiring a minimum of 6 months of employment for benefits, its financial impact on Q1 FY26 is expected to be insignificant, with cash flow benefits to employers accruing from Q4 FY26. The company ended the quarter with 0 gross debt, although average debt during the month led to interest costs, which management expects to decline as operating cash flows improve in Q2.