Quess Corp Reports Strong Q2 FY2024 Results

Bengaluru-based business services provider Quess Corp reported robust top-line growth along with significant improvements in profitability.

Quess Corp’s total revenue for Q2 FY2024 stood at Rs 4,748 crores, up 11% year-on-year. Profit after tax jumped 79% to Rs 71 crores compared to Rs 40 crores in Q2 FY2023. The company’s headcount increased to 547,000 in Q2 FY2024, a 9% growth over Q2 FY2023.

For the first half of FY2024, Quess Corp recorded 13% year-on-year revenue growth to Rs 9,349 crores. Profit after tax for H1 FY2024 was Rs 119 crores, a 10% increase compared to the same period last year.

The company attributed the strong performance to focused efforts in developing automation, building operational efficiencies and concentrating on high margin businesses. Quess Corp’s higher margin platforms like Global Technology Solutions (GTS) and Operating Asset Management (OAM) delivered consistent profitability improvements.

GTS revenue grew 11% year-on-year in Q2 FY2024 to Rs 584 crores, with reported EBITDA margin expanding by 184 basis points to 17.82%. Allsec Customer Experience Management registered 18% revenue growth driven by 21% increase in North America. The company’s non-voice BPM business expanded 34% year-on-year.

OAM revenue rose 8% to Rs 705 crores in Q2 FY2024. Reported EBITDA margin increased by 71 basis points to 4.98%. The food services business continued its growth trajectory, aided by new clients in education and industrial sectors. Gross margin expanded 33% year-on-year.

The Workforce Management segment remained the largest business for Quess Corp with Q2 FY2024 revenue of Rs 3,315 crores, up 13%. The company added 83 new customers during the quarter. Growth sectors like manufacturing, BFSI and retail contributed to a 14% year-on-year increase in headcount to 430,000 for this segment.

For the Product Led Businesses, Quess reported a 13% quarter-on-quarter rise in revenue to Rs 143 crores in Q2 FY2024. Foundit, a SaaS platform for contractor management, registered 35% year-on-year sales growth.

Commenting on the results, Quess Corp CEO and ED Mr. Guruprasad Srinivasan said, “We are delighted to report robust revenues of Rs 4,748 crore, up by 11% YoY and a PAT of 71 crore, up by 79% YoY. Our higher margin platforms, GTS and OAM have delivered a consistent increase in profitability along with improvement in margins over the last few quarters. We remain bullish about future growth prospects.”

Quess Corp reported healthy cash generation during the first half of FY2024. Net cash position improved to Rs 138 crores as of September 2022 compared to Rs 82 crores as of March 2022. Operating cash flow to EBITDA ratio stood at a healthy 62% for H1 FY2024.

The company’s market valuation also got a boost after its listed subsidiary Allsec Technologies crossed Rs 1,000 crores in market capitalization with 23% CAGR growth since Quess’ initial investment in 2019.

Overall, Quess Corp’s latest quarterly performance indicates the company’s strengthening fundamentals. Significant increase in profitability combined with steady growth across its business segments paints a positive picture.