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    Quess Corp

    QUESSGood
    Services·30 Oct 2025
    Management Summary

    Quess Corp reported a strong Q2 FY26, achieving its highest ever quarterly EBITDA and maintaining robust operating cash flow conversion. The company demonstrated balanced growth across its General Staffing, Professional Staffing, and Overseas segments, with a strategic focus on high-margin businesses. Despite a prior NBFC ramp-down impacting YoY headcount comparisons, sequential growth and a healthy pipeline indicate continued momentum.

    Highlights

    7
    • Consolidated Revenue of ₹3,832 crores, up 3% YoY and 5% QoQ.

    • Highest ever quarterly EBITDA of ₹77 crores, up 11% YoY and 10% QoQ, with margins crossing 2%.

    • PAT stood at ₹52 crores, up 2% YoY and 2% QoQ, translating to an EPS of ₹3.5 per share.

    • Operating cash flow conversion at a healthy 109% for H1 FY26.

    • Added over 21,000 associates in Q2, bringing total associate count to 483,115, up 5% YoY.

    • Professional Staffing delivered highest ever EBITDA of ₹27 crores, up 37% YoY, with 12.2% margins.

    • Net cash balance of ₹273 crores after paying approximately ₹90 crores in dividends.

    What Changed2

    vs Q3 FY26

    Guidance items13 → 10 (-3)Risks discussed2 → 3 (+1)

    Key financials

    Single quarter

    10 metrics
    1. 01Revenue₹3,832 Cr+3%YoY
    2. 02EBITDA₹77 Cr+11%YoY
    3. 03EBITDA Margin2.0%
    4. 04PAT₹52 Cr+2%YoY
    5. 05EPS₹3.5+2%YoY

    Segment breakdown

    • General Staffing₹3,317 Cr86.6%
    • Professional Staffing₹224 Cr5.8%
    • Overseas Business₹290 Cr7.6%
    Donut· Share of Revenue

    Guidance & targets

    10
    CategoryTargetPriority
    Headcount
    Net Additions
    10,000-15,000
    High
    Headcount
    YoY Growth
    Single-digit
    Medium
    Finance Cost
    Quarterly Finance Cost
    ₹9-10 crores
    High
    Profitability
    Professional Staffing EBITDA Margin
    Low-double digit
    High
    Working Capital
    OCF Conversion (sustainable range)
    80-90%
    Medium
    Working Capital
    OCF EBITDA to OCF Conversion (full year)
    70%
    High
    Tax Rate
    Effective Tax Rate
    10-12%
    High
    Origint Business
    Contribution to numbers
    Marginally contributing
    Medium
    General Staffing
    Headcount Growth
    Growing headcount YoY
    High
    Overall Performance
    H2 Performance
    Repeat H1 performance
    High

    Risks & concerns

    3
    RiskSeverity

    NBFC Ramp Down Impact on Headcount

    A ramp down of ~38,000 associates in Q4 FY25 by an NBFC client caused a marginal 5% YoY decline in overall headcount, impacting current YoY growth comparisons.Management acknowledged

    medium

    Seasonality and Bonus Payouts

    Diwali bonus pass-throughs (INR 120-150 crores) in Q3 FY26 for Collect & Pay business will cause a temporary blip in gross margins, but without yielding extra gross margin.Management acknowledged

    low

    Telecom Sector Slowdown

    The telecom vertical, part of the CRT segment within General Staffing, is experiencing slower growth and declining hiring, impacting the overall CRT segment's growth.Management acknowledged

    low

    Q&A highlights

    3

    “As Guru said in his brief that the open mandate at this point of time is still 27,000. And that's where we'd like to focus our attention on, and on a continued basis deliver steady headcount growth quarter-on-quarter. So that's what the business is geared for.”

    Analysts questioned the sustainability of headcount additions and the impact of seasonality, to which management affirmed a mature sourcing engine and confidence in steady QoQ growth, supported by open mandates.

    asked by Deep Shah

    3 min read6 chapters

    Detailed Narrative

    01

    Q2 FY26 Consolidated Performance Highlights

    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.

    02

    General Staffing Drives Headcount Growth

    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.

    03

    Professional Staffing Achieves Record Profitability

    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.

    04

    International Business and Digital Platforms Expansion

    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.

    05

    Financial Management and Outlook

    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.

    06

    Strategic Focus on Margin Expansion and Diversification

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.