QUESS Q3 FY26 earnings call.
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Revenue
₹3,930 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹80 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 a strong Q3 FY26 with record quarterly EBITDA of ₹80 crores (up 28% YoY) and margin expansion to 2.03% (+47bps YoY), driven by mix shift toward higher-margin professional staffing and overseas businesses. Adjusted PAT came in at ₹62 crores (up 29% YoY) with robust operating cash flow conversion at 92% of EBITDA. The company declared an interim dividend of ₹5 per share. General staffing revenue was ₹3,490 crores with 1.3% EBITDA margin, while professional staffing achieved 12.5% EBITDA margin (all-time high) on ₹230 crores revenue. Overseas business crossed 7% EBITDA margin milestone at ₹290 crores revenue. Management targets 15,000+ net headcount additions in Q4 and aims to scale to 1 million associates over 4-5 years. Key risks include labor code implementation creating near-term demand uncertainty and delayed collections from government skilling projects (₹120 crores ECL provisioned).
Colored figures show movement against the previous available record.
Guidance to track
- Management targets net headcount additions exceeding 15,000 in Q4 FY26, building on strong pipeline and open mandate of 37,000+ positions, with expected recovery in manufacturing and construction sectors post labor code consultations.
- Management targets professional staffing to exit Q4 with a ₹30 crore quarterly EBITDA run rate, reflecting steady shift toward higher-value, higher-margin GCC and niche digital roles.
- Management targets EBITDA margin correction to 1.5-1.6% in near-term and 1.8% in medium-to-long term from current 1.3-1.4%, supported by multi-vertical strategy and value-added services in manufacturing and construction.
- Management confirms 11-12% EBITDA margin is structurally sustainable for professional staffing, supported by GCC demand, portfolio rationalization, and exit from low-margin contracts.
Risks flagged
- ₹120 crores ECL provision from Q4 FY25 remains partially unrecovered. Collections delayed into Q4 FY26 due to new RBI escrow process requirements for state government payments.
- Labor code effective November 21 caused customers to pause headcount additions while assessing cost impact. Over 830 client consultations conducted; recovery expected in Q4 but timing remains uncertain.
- Analyst questioned whether NBFC-related dehiring is fully behind. Management cited past incident where large BFSI customer insourced volumes; diversified into manufacturing and construction to mitigate but sector exposure remains significant.
- Analyst raised 20-25% YoY decline in other expenses contributing to profit beat. Management deflected question, requesting offline discussion—specific drivers of cost reduction were not clarified on call.
Key quotes
- In the last five quarters our EBITDA margin has expanded from 1.6% to currently at 2.03%. So if you look at it there's been a 47 basis point improvement in EBITDA margin in the last five quarters of our operation of Quessco.
- The medium to long-term impact after this reset is over will be towards formalization and towards consolidation. We feel that with the kind of understanding that Quess has on governance on compliance and being able to keep our customers always indemnified for the laws in India, there will be more and more clients who would be interested in working with Quess for our abilities and we will be able to see more tailwinds over a period of time.
- We have a clear ambition to scale to 1 million associates over the next four to 5 years worldwide with high cash flow generation and a sustainable dividend policy as guardrails that must be met.
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