Quess Corp Q2 FY27 Earnings Call — Analysis (NSE: QUESS)
Quess Corp reported Q2 FY27 revenue of ₹4,396 Cr (+15% YoY) and adjusted EBITDA of ₹92 Cr (+20% YoY), led by a rebound in General Staffing additions and expanding gross margins in Professional Staffing.
Result quality: stable — Results context unavailable. Management sentiment: optimistic.
The take
Q2FY27 Consolidated Revenue ₹4,396 Cr ( +15% YoY ) .
Results
Revenue ₹4,396 Cr +15% YoY; Adjusted EBITDA ₹92 Cr (+20% YoY, 2.1% margin); PAT ₹75 Cr (+44% YoY).
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Consolidated Revenue | ₹4,396 Cr | +15% | yoy · Q2FY27 |
| Consolidated Revenue | ₹4,396 Cr | +5% | qoq · Q2FY27 |
| Adjusted EBITDA | ₹92 Cr | +20% | yoy · Q2FY27 · Excludes ₹6 Cr non-cash ESOP |
| Adjusted EBITDA Margin | 2.1% | +10bps | yoy · Q2FY27 |
| Reported PAT | ₹75 Cr | +44% | yoy · Q2FY27 |
| General Staffing Revenue | ₹3,823 Cr | +15% | yoy · Q2FY27 |
| General Staffing EBITDA | ₹57 Cr | +23% | yoy · Q2FY27 |
| Professional Staffing Revenue | ₹254 Cr | +13% | yoy · Q2FY27 |
| Professional Staffing EBITDA | ₹27 Cr | -2% | yoy · Q2FY27 |
| Overseas Revenue | ₹318 Cr | +10% | yoy · Q2FY27 |
| Overseas EBITDA | ₹22 Cr | +23% | yoy · Q2FY27 |
| Net Cash | ₹471 Cr | point_in_time · Q2FY27 · Sep-26 | |
| Headcount | 504,000 | +4% | yoy · Q2FY27 |
Guidance
Management guided for 10,000–15,000 quarterly net associate additions in General Staffing and targeted an exit EBITDA margin of near 12% in Professional Staffing for FY27.
Key themes
Volume recovery and technology-led operational efficiency
Operational commentary
- General Staffing net associate additions reached 20,857 in Q2 FY27 after three subdued quarters, supported by 116 new contract additions and strong hiring in manufacturing (+7,800 associates).
- The AI sourcing engine 'The Brain' contributed ~13% of General Staffing hiring with 24,700 cumulative offers generated.
- Professional Staffing signed 62 new contracts in H1 FY27 (surpassing FY26 full-year additions); GCCs contributed 71% of headcount and revenue.
- Digital platform business BCPL turned EBITDA positive in Q2 FY27, scaling from 14 paying clients in March to 54 in September.
- Overseas segment saw Malaysia revenue grow 50% YoY and Philippines grow 15% YoY, adding 33 contracts across international geos.
- General Staffing DSO improved to 24 days (from 26 days) with total quarterly collections crossing ₹5,000 Cr across the Group.
Analyst Q&A
Q. What explains the divergence between 20,000 net headcount additions and only 12% YoY organic revenue growth in General Staffing?
Approximately 65% of the net additions were onboarded in September (the final month of the quarter) due to festive seasonality and client ramp-ups, creating a revenue lag that will flow into Q3.
Q. What led to the Professional Staffing EBITDA margin compression (down to 10.5%), and what is the sustainable margin level?
Compression was driven by front-loaded strategic investments in leadership, sales, and delivery for Quess IT Solutions; gross margins actually improved to 20.5%, and full-year EBITDA margin is guided at 11-12% with an exit near 12%.
Q. Why did unallocated corporate expenses jump to ~₹21 Cr during the quarter?
The increase is driven by front-loaded non-cash ESOP charges under accounting standards, expected at ~₹20 Cr in FY27 and tapering down to ~₹15 Cr in FY28.
Q. What is the reason for high unbilled revenue relative to trade receivables?
Roughly ₹300 Cr of unbilled revenue relates to accounting provisions for the new Labour Code implementation, which will be billed and recovered as employees are paid, with the remainder matching normal 15% top-line growth.
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