🚀 Quess Corp Stock: Brokerages See 30-45% Upside on Leaner Model and Margin Focus
Quess Corp Ltd, one of India's largest business services providers, is catching investors' eyes after undergoing a strategic transformation. Brokerages including IIFL and B&K Securities are bullish on the company's future, projecting a 30-45% upside in its share price. This optimism is rooted in Quess’s move toward an asset-light, focused business model following its recent demerger, improved margin visibility, and return on equity (RoE) estimates of up to 25% by FY27.
📉 FY25 Hiccup, But Future Looks Bright
The company’s FY25 earnings took a one-time hit of ₹161 crore due to an accelerated expected credit loss provision — a move management clarified was necessary to clean up the balance sheet and accelerate a leaner operational strategy. Despite this short-term impact, analysts remain upbeat. They forecast a 23% compounded annual growth rate (CAGR) in earnings between FY25 and FY28.
📈 Brokerages See Share Price Targets Up to ₹453
Quess Corp's shares traded muted on June 26, but that hasn't dimmed analysts’ long-term confidence. IIFL has set a price target of ₹410, while B&K Securities is even more optimistic at ₹453. Their bullish stance stems from Quess’s strategic restructuring, enhanced capital efficiency, and the company’s growing focus on profitability.
“We’re not just chasing topline,” said CFO Sushanth Pai. “We’re chasing profitability that outpaces revenue growth.”
🏗️ The Restructuring: A Strategic Move
In February 2024, Quess approved a major demerger plan to unlock value across verticals. The company split into:
- Quess Corp Ltd – Workforce Management
- Digitide Solutions Ltd – BPM, HRO, Insurtech
- Bluspring Enterprises Ltd – Facility Management, Industrial Services, and Investments
This leaner, vertical-focused structure allows the company to scale profitably while divesting legacy operations that dragged down performance in the past.
📊 Segment-Wise Strength Driving Margins
1. Workforce Management (72% Revenue in H1 FY25)
This core segment remains the growth engine. Quess serves over 3,000 clients and has nearly 500,000 associates. Its general staffing revenue mix rose to 84% in Q2 FY25 (vs 79% in FY22). Additionally, the professional staffing division — though only 8-9% of revenue — now contributes 23% to the bottom line thanks to high-margin GCC mandates. Margins in this division reached an all-time high of 9.4%.
2. Operating Asset Management (15% of Revenue)
Quess is a leader in IFMS, security services, and industrial maintenance. It manages over 360 million sq. ft. of space and upgraded more than 110,000 telecom sites. Revenue per headcount/month improved from ₹23K in FY22 to ₹27K in FY25, indicating enhanced operational efficiency.
3. Global Technology Solutions (12% of Revenue)
This segment includes customer lifecycle management (CLM), non-voice BPO, IT services, and platform solutions. It’s one of India’s top BPM players and processes over 1.4 million payslips monthly. CLM's share of segment revenue increased to 51% in Q2 FY25 from 42% in FY22 — highlighting the growing demand for digital customer solutions.
4. Product-Led Business (1% of Revenue)
Quess’s digital platforms include Foundit (India’s #2 job board) and other tech products like Qjobs, WorQ, and Dash. Foundit boasts over 21.6 million active users, 22.6 million monthly visits, and 879 job postings — positioning it as a digital disruptor in blue-collar hiring.
🌍 Expanding Global Footprint
Quess’s operations are predominantly in India (91% of revenue in FY24), but its presence in North America, the Middle East, and APAC is growing. The firm operates 73 offices in India and 23 international locations.
🛒 Recent Acquisition Activity
In December 2024, Quess acquired food catering and facility management units from Archer Integrated Services Pvt Ltd and Astrin Traders for ₹11 crore — adding synergy to its facility management vertical.
💡 CEO's Vision: Focused Execution
“We are now focused on vertical-specific growth and operational excellence. That gives us an edge in a competitive industry,” said CEO Guruprasad Srinivasan.
🔮 The Road Ahead: RoE and Free Cash Flow Key Metrics
Quess trades at a discount to peers despite delivering better return ratios and strong free cash flows. Analysts expect the company to achieve 20-25% RoE by FY27, driven by capital-efficient growth and minimal debt. With improved profitability and reduced legacy risks, Quess is positioning itself as a top choice for long-term investors in the business services sector.
📌 Final Thoughts: Time to Watch Quess Corp Closely?
The company’s transformation story is compelling — moving from a volume-centric to a value-driven model. With a renewed focus on profitability, global expansion, strong business verticals, and digital acceleration, Quess Corp may emerge as a multibagger in the next few years.
For retail investors looking for undervalued growth plays in the staffing and services sector, Quess Corp is worth a deeper look.
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