QUESS Q2 FY26 earnings call.
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Revenue
₹3,832 Cr
verified against source
Revenue YoY
3%
reported change
EBITDA
₹77 Cr
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Quess Corp delivered ₹3,832 crore revenue in Q2 FY26 with 3% YoY growth, driven by strong festive hiring in General Staffing where 21,283 net additions marked the best quarter in six quarters. EBITDA reached an all-time high of ₹77 crore with margin crossing the 2% threshold for the first time, though overall margin improvement remains modest. PAT stood at ₹52 crore with EPS of ₹3.5. The professional staffing segment showed exceptional performance with 12.2% EBITDA margins on the back of GCC-focused engagements and rationalization of low-margin MSP contracts. However, the revenue growth trajectory of ~3% YoY reflects the hangover from the 38,000 associate NBFC ramp-down in Q4 FY25. Management guided for H2 to mirror H1 performance with 10,000-15,000 net additions expected per quarter, targeting single-digit headcount growth for the full year. Key risks include sustained margin pressure in the 86%-revenue-contributing General Staffing business, Singapore market weakness, and the pending income tax litigation hearing on December 1, 2025.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects to deliver similar headcount and revenue growth trajectory in H2 FY26 as achieved in H1, building on 21,000 net additions in Q2 with 10,000-15,000 additions projected per quarter.
- Despite Q2 sequential recovery, management targets single-digit headcount growth on a full-year basis due to the Q4 FY25 NBFC ramp-down base effect.
- CEO Kapil Jooshi guided that margins in the 11-12% range are expected to sustain going forward, supported by GCC demand and operational efficiency with no major IDC investments planned.
- Finance cost expected to moderate to ₹9-10 crore per quarter with ~50% from operational interest and remaining from non-operational interest, rationalizing from the higher Q2 level.
Risks flagged
- Despite volume growth and operational improvements, EBITDA margin for the 86%-revenue-contributing General Staffing segment remains flat at ~1.4% QoQ. Bossu payments in Q3 (₹120-150 crore pass-through) will create a temporary margin blip without extra gross margin in collect-and-pay model.
- One large MSP program sunset resulted in ~₹30 crore quarterly revenue decline (pass-through, not headcount). Management continues pursuing such deals for market share benefits, creating revenue volatility even as margins hold. IT services recovery, while visible, is yet to meaningfully offset this.
- Next IT department hearing scheduled for December 1, 2025. Management declined to provide specifics when asked, deferring updates to the next quarter. No tax provision or liability quantification disclosed.
- Singapore business required offsetting IT softness with general staffing expansion. Local hires increased from 17% to 43% to compensate, but overall market remains structurally challenged for IT-heavy business.
Key quotes
- We've got to that point now [50% contribution from high-margin businesses] is the time for us to deepen that for H2 and thereafter.
- Gross margin we will sustain, on operational efficiency point of view we don't have any plan for major investment in IDC so hopefully our margin will be stable low double digit going forward in the same range what we have reported for last two quarters.
- OCF to EBITDA conversion remains strong at 109% underscoring the quality of earning and disciplined cash flow management.
- New tax rate or the tax incidence should be in the range of 10 to 12%. So as compared to previously which was we had guided for 5% but I think the new normal on the tax rate is around 10%.
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