Analysing Quess Corp: 3 Reasons Behind The Company's Strong Q4, FY27 Outlook & More

Added: 2026-05-30

[00:00:07]Hello and welcome to KYC. I'm Sharad Dubey and you are watching NDTV Profit.

[00:00:11]This is the KYC show where I get you important companies, what's their growth trajectory looking like, and is there any alpha to be made or not. Let's start with one company today. Very interesting company, but before that, try to guess it. Or try to Quest it. That's one hint as well. [music] It's a global staffing solutions company. Let's move ahead.

[00:00:31]It's was a restructuring was done in 2025 largely in the June month. So, it's pretty much interesting. Stock interestingly is up 26% from March lows as well. And the company operationally has come out with a decent set of numbers. But, which is this company? That's more important to understand and I'm sure you must have guessed it by now. The company is Quess Corp. This is the company which we are going to talk about. But, why are we calling this company? Is there a new strategy at play?

[00:01:01]Is there something called Quess Corp 2.0? We'll try to understand this plan and going ahead which areas should the company be focusing on? Interesting.

[00:01:10]Let's do see the second question. Is the gig economy versus non-gig economy? How are the solutions looking like when it comes to the staffings? Also, the expected demand from this staffing solution industry from the government itself. That'll be pretty much interesting. There are some needs which the company wants to ask the government.

[00:01:29]The skilled talent exports, how big this market is? Is there any niche work at play? And also, the FY27 revenue and margin outlook as well. Professional versus general staff staffing, where is the growth momentum looking like? Is there an up move coming in from the BFSI segment? And of course, 71% of their key businesses come from the GCC segment as well. And the overseas expansion. Are they going very heavy on new markets such as Singapore? And to understand the entire picture, we'll be joined in by Rohit Rohit Bhatia I mean to say he's the CEO at Quess Corp. So Rohit will make us understand where does the company and the industry stand. But what does the company actually do? Let's try to understand and what are the key services they are offering right now? That's pretty much interesting. There is of course professional solution and general staffing solution. It was established in the year 2007 in Bengaluru.

[00:02:24]Also, important category is India's number one staffing organization. This is by head count and fourth largest globally by the same definition. So interesting take and the head count is roughly 4 lakh 80,000 and they are having 30 plus offices as well. This is how they're expanding and almost 2200 clients with over 30% more than 5 years tenure. That's where the stickiness comes in. Footprint is there across eight countries I had mentioned you regarding the operational front and 26% market share they are having. If you see the flexi workforce head count, that's also an important area where there is a good momentum happening. Our general staffing roughly 281 new contracts were added in 2026 and also if you look at the operating EBITDA how things work out for general staffing, it is roughly 50% of the business still come here.

[00:03:18]Remember India as a whole is still a human capital market and this company is a catalyst for it. That's an important point. Also 30% of this EBITDA breakup comes from the professional staffing and the remaining 20% comes from the overseas business. So these are the three categories.

[00:03:35]But for key FY26 takeaways professional staffing the total head count for the GCC segment I was talking about is 71%. This is why this is important because the way the GCC explosion is happening in India, that is where the momentum is coming in.

[00:03:51]Overseas business 125 new logos with a double-digit growth in revenue and EBITDA. So, of course, there is a good surprise happening and India's uh growth model is being applied to other nations as well. But, how the industry is there?

[00:04:05]The India staffing and recruitment industry, there's a CAGR of almost 13% expectations is there. Look at 2022, it was a $19 billion market and expectations by 2030 is almost at $50 billion mark. But, the new dividend policy is something which is pretty much interesting for a stock like this. It will return almost 75% of the free cash flow to the shareholders. That's an important takeaway. And with this, we'll come via interim, final, or share buyback cumulatively over the next 3 years. So, there is definitely, you know, apart from growth, there's a dividend policy as well. But, what's working for the company? That's pretty much important to understand. So, there is a new ventures in Quess Corp 2.0.

[00:04:48]We'll try to understand that from the management and Lohit will explain us that. He's the beneficiary of GCC explosion. That's an important take as well. Also, the third important point is the valuations are cheaper compared to global peers. Sola satra ke PE pe a raha hai ye company. Strong affiliations in international businesses, and that is how they make these tie-ups with a global organization such as ILO, the International Labour Organization, as we call it. And of course, the new dividend policy. So, that's pretty much interesting. To ye to maine aapko puri company ki kahani bata di. Lekin, KYC ka kahani kya hai? That's important as well. And to start KYC's kahani, we are having the ratings where we judge the company. Of course, we have got the income statement, balance sheet, cash flow, and of course, return ratio to show how things have progressed, especially after the demerger which took place in the middle of 2025. So, our numbers will be a bit different to compare them with shareholding. Street credit will also be there. Valuations we'll compare them with their peer that is TeamLease Services to understand whether the stock is cheap or not. And of course the analyst take are they bullish on this counter? If yes, what's the return potential? So a lot of questions, but I'll get you all the answers. Let's start with the first one income statement. So they take the mighty number largely operationally take the and if you look at how things have gone up it's been a pretty steady mover. It hasn't been a very huge mover. Remember there is a big base also for a company size like this and a decent returns has come in and a good up move in the pad at least for 222 crore rupees. Kabhi labor code revision impact after a Kabhi change in business model after a and overall if you look at the numbers the top line was kind of a D growth but the magic is there in the bottom line numbers sequentially 16% up and also you can see 7 and a half percent up especially for a bit that pad respectively. And of course looking at the margin profile also seems quite decent but this is how the business rolls. So let's give it a neutral rating right now but let's move on to the balance sheet and balance sheet is something which I like because it's well capitalized. I have removed the difficult portions for you for these two are important to actually track. Cash bank balance is pretty strong or the best companies get up back up cut the end in key buyback what they are in key dividend they got to hear because they are cash heavy businesses. Will they acquire more international companies or not? That's also one question to be asked with Rohit. But as of now it is well capitalized so it's a strong thumbs up when it comes to the balance sheet.

[00:07:19]Let's talk about the cash flows and see what happens and largely most of the cash flows business is you could say a decent kind of a payment schedule which are there operating cash flows. However in FY26 there is a slight dip coming in and even the net cash flows also there is a down take. Remember there has been an impact of the restructuring as well and because of that these numbers are coming. Largely it's called comparable near after the benefit of doubt that they have already rating off or it's called neutral rating dengue.

[00:07:48]Let's talk about return ratios and see what has happened and we have taken of course the last 3 years the ROC numbers and the ROE numbers. Remember these are adjusted numbers coming in and now company has been demerged. There was an important restructuring as well. In FY24 both of them between 12 to 15% but then there's a gradual up move coming in and it is sustaining. Look at this ROC number for FY26. This is at 31% and around 20% ROE. So this is definitely a very positive sign for the investors. So I'm going to give this a strong thumbs up when it comes to the return ratios. Now let's look at the share holding what has happened. Largely promoters give up to increase take my quick changes FI's there is a little bit of concern in my analysis. It was around 14% and that has come down to 8%. So there has been a 6% sell-off but on the other hand to negate it DI's have been lapping up right from you could say around 10% that has actually gone up and it's around that 12% mark. So this kind of nullifies or averages things out. So it's even Stevens when it comes to the institutional holding and for that I'll be giving this a neutral rating as well.

[00:09:03]But of course let's talk about the street cred also how much the stock has actually made money. Of course we were not going to get last 5 years data because company got demerged. So whatever is the nearest you know numbers to look at that's where we'll focus on. That's this is where the demerger had happened from June onwards the things started changing. From March lows if you're a trader you have made money everywhere so this stock is also there so the interest is back in the stock and for a trader you have made money congratulations but this year itself stock has been flattish. In the last 6 months >> [music] >> stock is down 8% as well. So, it's still a neutral rating. We need to give it more time to understand this trend whether this becomes a multi-bagger or not. But remember, of course, there's a dividend adjustment and everything at play. Let's look at the valuations.

[00:09:49]What's happening here? Quess Corp is currently trading at a 12-month forward P/E of 12.5 times. Compare that with TeamLease, it's at 15 times. Matlab, competitor say cheaper hai. But apne 5-year average P/E say utna sasta nahi hai. It's at 11 times. And this is at around 12.5 times. So, on its average basis, the way it trades, it's still on the higher side. But look at TeamLease, that's more expensive as well. So, historically, it is expensive, but compared as with peer, it is definitely cheap. So, I have kept it neutral and given this a neutral rating when it comes to the valuations. But apart from valuations, let's talk about the analyst. Analyst community kya kehti hai? Totally, nine analysts are tracking this stock. There's not a single sell rating for this stock, but majority of them, around 87.5% of the analysts have a buy rating.

[00:10:41]Remaining 12.5% are having, you could say, a hold rating. But target price kitna hai? Ye important hai analyst jo batate hai. 12 mahine ka target price is 277 rupees per share. That means from the current levels, 30% of return potential is expected. So, overall, analysts are giving a strong thumbs up when it comes to Quess Corp. So, let's try to understand, you know, last time the company had come in KYC in September 2025.

[00:11:12]We had given them three and a half.

[00:11:13]Let's see how has the company changed?

[00:11:16]And moreover, we see the balance sheet has strengthened and the return ratios post the restructuring has improved a lot. So, there is a good point over here. Cash flow and income statement giving a neutral view. While on the other hand, shareholding, street cred, and valuations, I have given this a neutral view, but the analyst take is quite bullish on it. So, is there an inflection point for the company? Is there a chance of re-rating? Those are the key questions coming to my mind. And overall, the KYC rating, let's put it out, is 5.5 out of it. So, definitely there has been an increase from 3.5 to 5.5. So, largely in line with the numbers which we give in a KYC, and slightly positive for a company in this space. But, to understand more and answer all our queries, we'll joined by Lohit Bhatia. He is the CEO of Quess Corp, and of course, he actually handles all the three segments as well. And 25 years of multi-industry experience is what Lohit has. An interesting snippet about him, he joined this company in 2011 as just a sales general manager for staffing, and then he has gone up to this group level CEO, and scaled this associate base from 13,000 to almost 480,000 in his tenure.

[00:12:32]Good afternoon, Lohit. It's always a pleasure to have you at NDTV Profit. Of course, the earnings were there a couple of weeks ago, but outlook I'd like to start with this new initiative, which is Quess Corp 2.0. What this is all about?

[00:12:45]Where is the focus all about?

[00:12:48]>> Uh thank you, Sharad. Good afternoon.

[00:12:50]It's always great to be on your show at NDTV Profit. Uh and I hope everybody is safe and well.

[00:12:56]Uh you know, if you really look at it, this is our 19th year of doing business.

[00:13:00]In the 19 years, proud to say that not only are we India's number one at 480,000 employees, we're also Asia's number one and fourth largest in the world as far as volume of talent and workforce management that we deploy. Our revenue stream as of now, as you would have already told your uh you know, viewers, is over 15,300 crores for the year. This year, we've been able to deliver consistent growth when it comes to our margin profile from 1.8 inching upwards towards 2.2% at our exit. We're a net cash company with about 270 odd crores plus. This is the sixth year consecutively that we've announced dividend for our shareholders 5 rupees and 5 rupees already given as interim and a final dividend sorry 5 rupees and 3 rupees as interim and interim special and another 3 rupees that we've given for our shareholders to approve at the ensuing AGM. Overall giving 11 rupees.

[00:14:03]This is also it's going to be heartening to all the shareholders of Quest that in the last 6 years Quest has returned 830 crores of cash back to its shareholders just by the forms of distribution of dividend consistently for these 6 years. So, when you have a platform like this which I've just elaborated and explained in 19 years, what is it that we want to do in future given India's benefit both from a demographic dividend point of view and India's strategic position in the global order. What we want to do is we want to continue doubling down on our volume strategy and value strategy within our existing Quest which is where our general staffing business will continue to expand and grow. Our professional staffing business will add margin profile on top of it and then will come the international staffing which we're also enhancing. But under Quest 2.0 we're feeling that there will be a new wave a resurgence of what can be created besides what we already see and besides what our shareholders already know of as Quest. In this we're looking at couple of new corridors and for us corridors would be Far East, corridors would be the Nordics, corridors would be Canada and US and corridors would be Israel and UK.

[00:15:20]Second, what are we looking at within those corridors? We're looking at segments. What could be the segments?

[00:15:25]One of the segments that we feel, again looking at the global order of, you know, aging population, demographic dividend, and citizens requirement of support in health care, aged care, technology workforce, construction, and MEP workforce.

[00:15:42]As you know, India is signing FTA agreements one after the other with multiple countries. And in every FTA, there is an embedded clause of talent mobility. And India is becoming a preferred destination for enhanced talent mobility from India to the rest of the world. So, under our Quest 2.0, this is one significant area that we want to look at. The second significant >> Yeah, go ahead, Lohit. What's the second one? Yeah.

[00:16:11]>> The second significant area is that if you really look at it, today Quest provides you talent as permanent employees, it provides you talent as temporary staff. We provide apprentices, and in some shape and form consultants as well. The fifth form of work which has started proliferating in our lives every day is the gig workforce. And we feel under Quest 2.0, gig is the additional form of livelihood and employment that we also want to participate in. It's still early stage, it's on the drawing board, and I'm sure very soon we'll be able to tell you more about that as well.

[00:16:44]>> Pretty much interesting, and we discussed about the gig economy as well.

[00:16:49]It's a pretty interesting take and a big industry, but the expected demand for the staffing solutions, you know, there is a some request coming in from your industry to the government. Is there anything, Lohit, you want to, you know, ask or, you know, say to the government through our mode?

[00:17:06]>> So, thank you for that question, and I think that's a very, very important structural question for India.

[00:17:11]Sharad, if you really look at it, 500 million Indians even today go and have informal work. Informal work is where you don't get a contract, you don't get an appointment letter, you don't get social security, you don't get skilling, and you don't get enhanced benefits over the course of your livelihood. Uh our industry, the staffing and the livelihood industry, is taxed at 18% under the GST because we were put in the services category, rightly so by the government because we are a services part of the economy. However, as the government came out with a massive revamp of GST 2.0, a lot of products have been pushed towards the zero or the 5% GST rating, whereas very few have been kept in the higher than 5% category. This, unfortunately, has created an anomaly for the workforce management industry or the staffing industry as labor suppliers and services to the rest of the economy. Our request to the government of India is that under services, if there is any segment that requires a relook at uh GST regime, maybe from an 18% to a much lower 5%, you will see unlocking of value and many Indians moving from informal labor market to formal labor market. And this will be beneficial because this will increase your uh formal financial inclusion, it will bring more money in the banking system, more insurance off-take will happen, you will have more PF ESIC coverages, there will be less vulnerability in society, and I think overall as a nation, we will be more proud about the kind of workforce that we have in this country.

[00:18:52]>> So, that Right. So, we discussed 2.0, we discussed what are the expectations or demand from the industry, but I just want to understand your company specific, any kind of outlook, guidance for revenue and margins, what's looking like for FY '27, FY '28?

[00:19:09]>> So, we don't give an immediate guidance, uh Sharad, but uh we have made our next three or four year plan, which has also been elaborated to the board and all our business leaders have made a next 48-month plan for themselves. Under this plan, we are looking at a steady state, you know, watch towards both enhancing our volume part of the business as well as the value part of the business. Under volume, we are looking at a head count growth upwards of 10% per year, which should yield about uh 45,000 workforce and more.

[00:19:44]Uh second, we are looking at enhancing our entire value realization and with that, we feel that the revenue trend would be close to about 13% to 15% range and that will yield to an 18 to 20% bottom line or profit pool growth for us consistently. This will also be aided by a change in mix and and going towards a higher margin businesses. As you know, today uh general staffing, which is the lower margin business, but yet better than uh the nearest competitors, uh we will we have 50% of our profit pool coming from general staffing. The balance 50% comes from higher margin businesses like international at 6.5% EBITDA and the domestic IT and professional staffing business at above 12% EBITDA margins. Uh so, if if that's what I can call it as a plan, but not so much as a guidance.

[00:20:39]>> Clearly, this is a four-year plan coming in uh from Lohit, but Lohit, let's try to understand the GCC segment. India is having its moment. Uh the GCC explosion all around, we can see a larger players coming, Mumbai, Hyderabad, Bengaluru, you name it. And also your overseas expansion. I need your commentary on both of these important topics.

[00:21:00]>> So, India today has about uh 2,100 GCCs already. If you really track these GCCs, they have come 64, 65% have come only from the Americas in the last 30 years, and many of them are part of the Fortune 1000 or Fortune 2000 companies. Our hypothesis is that in the coming period, it will be generation one companies primarily from the Nordics, primarily from Far East, primarily from your Middle Eastern region. These will be companies which are generation one companies between the one to 15 billion dollars, and the kind of solutions that they need is in the range of 50 to 150 million dollars. Uh they would be coming to India one because of the quality of the talent and the scale of talent that India can provide. Second, they're obviously coming for enhanced infrastructure which is getting created in the country. Quess along with two of its other listed peers now, uh group companies, three of us, uh 80% of the work can be done uh by Quess Corp itself, which is related to the talent part. The balance 20% with our other group companies which are also listed or other general market operators will be able to provide a plethora of services for build, operate, transfer as far as the GCCs is concerned. And these GCCs will again somewhere dovetail back from those five corridors that I spoke about, which is part of our Quess 2.0 journey.

[00:22:25]>> Right. Uh Lohit, uh that's pretty interesting take coming in, but we understood and more clarity has come in for the market, especially after the restructuring has come in, and this is the way to actually treat Quess Corp. Uh the Lohit, it's always a pleasure to have you at NDTV Profit and best of luck for the future and your four-year to almost 10-year plans as well. So, that's the management of Quess Corp actually, especially coming in after the restructuring and giving out their 2.0 plans, and we are the first channel to get that, interestingly. And let's see whether this momentum continues or not and their ambitions are met or not, that's the question, but only time will say that. But for those interesting stories like this, stay tuned to NDTV Profit and yes, keep watching KYC.