Quess Corp

Quess Corp delivered a robust Q2 FY26, with consolidated revenue reaching ₹3,832 crores, marking a 3% year-on-year and 5% quarter-on-quarter increase. The company achieved its highest ever quarterly EBITDA of ₹77 crores, growing 11% YoY and 10% QoQ, with EBITDA margins crossing the 2% mark. PAT stood at ₹52 crores, up 2% YoY and QoQ, translating to an EPS of ₹3.5 per share. The H1 FY26 EBITDA to OCF conversion remained strong at 109%, underscoring disciplined cash flow management, and the company closed the quarter with a net cash balance of ₹273 crores.

The General Staffing segment reported a revenue of ₹3,317 crores, growing 6% YoY and 3% QoQ, contributing 86% to the total company revenue. It recorded its strongest quarter in six quarters with 21,283 net additions, driven by festive hiring in manufacturing, BFSI, consumer, retail, and telecom. The total associate count reached 470,337, with a robust sourcing engine onboarding over 55,000 associates. Despite a 23% YoY decline in segmental EBITDA to ₹46 crores, margins remained stable at approximately 1.4%, and DSO was maintained at 25 days.

Professional Staffing continued its strong performance, delivering a revenue of ₹224 crores, up 11% YoY, despite an 8% QoQ decline due to the sunset of a large MSP pass-through contract. The segment achieved its highest ever EBITDA of ₹27 crores, a 37% YoY and 10% QoQ increase, with double-digit EBITDA margins at 12.2%. This was attributed to sustained demand for skilled talent in higher-value areas and the rationalization of low-margin contracts. Approximately 73% of Professional Staffing headcount is now tied to GCC-led projects, particularly in digital and tech roles.

The Overseas business delivered a steady performance with revenue of ₹290 crores, up 3% YoY and 2% QoQ, and EBITDA of ₹18 crores, up 27% YoY, maintaining a 6.2% margin. Headcount grew 16% YoY to 5,730, with Middle East achieving its highest ever EBITDA of 12.8%. In Digital Platforms, Hamara Jobs now boasts over 12.6 million registered candidate profiles, solidifying its leadership in India's blue-collar recruitment. Taskmo, the gig workforce model, secured its first large-scale gig contract worth ₹5 crores, deploying 1,500 taskers nationwide.

Management expects finance costs to rationalize to ₹9-10 crores quarterly in coming quarters. The effective tax rate is guided to be 10-12% as the new normal, up from a previous guidance of 5%, reflecting a higher contribution from high-margin businesses. For H2 FY26, the company anticipates similar growth to H1, with net additions of 10,000-15,000 associates in the coming quarters, aiming for single-digit YoY headcount growth by year-end. The OCF conversion is expected to be sustainable at 80-90% and 70% for the full year EBITDA to OCF conversion.

Quess is strategically shifting its General Staffing mix towards higher-margin segments like manufacturing apprenticeship, which has 77,000 people and is growing 30%+ YoY. Emerging businesses like Value-Added Services (VAS) and construction, though currently contributing less than 8% to General Staffing, are expected to drive higher gross and EBITDA margins in the next 1-3 years. The company also noted a healthy pipeline of 27,000 open mandates in General Staffing and 1,300 in Professional Staffing, supporting future growth.