QUESS - Quess Corp Limited Share Price

In the Q2 FY26 earnings call, Quess Corp's management provided a positive outlook, highlighting the company's strong execution and growing momentum. The management reported revenues of INR 3,832 crores for Q2, marking a 3% year-on-year growth, and EBITDA reached an all-time high of INR 77 crores, up 11% year-on-year. They noted that the EBITDA margin crossed the 2% threshold, with operating cash flow conversion at a remarkable 109%. The company's PAT was reported at INR 52 crores, translating to an EPS of INR 3.5 per share.

Major forward-looking points included:

1. Headcount Growth: The total associate count grew to 483,115, with a net addition of 21,283 associates in the quarter, demonstrating significant recruitment momentum.
2. Segment Performance: General Staffing delivered the strongest growth, contributing INR 3,317 crores in revenue, up 6% YoY, owing to seasonal demand.
3. Professional Staffing: Revenue grew 11% YoY to INR 224 crores, with EBITDA margins reaching 12.2%. The focus remains on profitable growth and rationalization of low-margin contracts.
4. International Business: The overseas segment reported revenues of INR 290 crores, with a 3% YoY growth, and efforts are being made to enhance regional contribution amid varying performances across markets.
5. Digital Platforms: The Hamara Jobs platform has amassed over 12.6 million registered candidate profiles, positioning Quess as a leader in the blue-collar recruitment sector.

The management expressed confidence in maintaining growth momentum in H2 FY26, supported by improved demand visibility, operational excellence, and capital efficiency strategies. The commitment to invest in high-value segments and technology continues, solidifying Quess's position as a market leader in domestic staffing solutions.

Here are the major questions and their detailed answers from the Q&A section of the earnings call transcript:

Question 1: "Regarding headcount adds, do you see this trend continuing, considering the festive hiring momentum?"

Answer 1: We are confident that H2 will see a similar performance as H1, given the positive market conditions. In Q3, which starts with Diwali and continues into the festive season, we aim to achieve net adds of about 10,000 to 15,000 associates per quarter. Our substantial open mandates of around 27,000 reflect our confidence in maintaining headcount growth and seizing seasonal hiring opportunities.

Question 2: "On Professional Staffing margins, can you provide clarity on their sustainability?"

Answer 2: While we've achieved historical margins through rationalizing low-margin contracts, we believe these improvements will be sustained. Current market demand, especially in mid-senior level roles, remains strong. We project operating margins should hold steady, likely in the low double digits, as our focus on operational efficiency and demand continues to align positively.

Question 3: "What accounts for the increase in finance costs despite stable net debt?"

Answer 3: The rise in finance costs primarily stems from increased working capital needs associated with higher-margin businesses, such as Professional Staffing. We expect these costs to rationalize in the coming quarters, estimating them around INR 9 to 10 crores quarterly, as operational efficiencies improve.

Question 4: "In General Staffing, what is the outlook for margins and PAPM?"

Answer 4: Currently, PAPM remains stable around 670 to 680. We are intensifying sourcing efforts, especially in Tier 2 cities, which represent increasing demand. With about 41% of our hiring now from sourcing rather than transfers, we believe this will positively affect margins as we continue to diversify our hiring strategies and improve sourcing efficiency.

Question 5: "Can you clarify your expectations for double-digit revenue growth in General Staffing?"

Answer 5: The growth we see is anchored by seasonal hiring and a rebound in the market. While H1 showed subdued year-on-year growth due to prior headcount cuts, we're confident in achieving 10% to 15% net adds moving forward. We aim to achieve double-digit growth by leveraging operational strengths and market demand in the second half.

These answers encapsulate the key points from the Q&A while adhering to the character limit constraint.