Quess margin slips as costs outpace revenue; tax benefit cushions profit
Revenue grew 5.14% QoQ, but a -15.50% tax rate limited the net-profit decline to 9.08% despite lower pre-tax profit.
Filed 30 Oct 2026, 20:42 IST · after market close · Quess Corp Ltd (QUESS)
Key takeaways
- Revenue rose 5.14% QoQ, but operating margin narrowed 0.07 percentage points as expenses grew 5.21%, faster than revenue.
- A tax benefit of Rs 10.02 cr cut the reported tax rate to -15.50% and softened the 9.08% QoQ decline in net profit.
- At 1.95%, Quess's operating margin was 19.55 percentage points below the Services median across 25 reported peers.
Price around the results
Revenue grew, but pre-tax profit fell
Quess reported consolidated revenue growth of 5.14% QoQ, while operating profit increased 1.40%. Pre-tax profit declined 24.73%, mainly because other income fell 92.05% from the previous quarter; other income contributed only 3.14% of pre-tax profit in Q2FY27. Net profit was flattered by a Rs 10.02 cr tax benefit, which more than offset the lower pre-tax profit.
Costs kept the operating margin near 2%
Expenses grew 5.21% QoQ against 5.14% revenue growth, narrowing operating margin by 0.07 percentage points to 1.95%. The available quarterly trend therefore shows a sequential margin decline from 2.02% in Q1FY27 to 1.95% in Q2FY27. Quess's margin was 19.55 percentage points below the 21.50% median for 25 Services peers that had reported.
Staffing additions supported the quarter's scale
Management said headcount reached 504,000 after a net addition of 21,000 in Q2. The company said General Staffing added more than 20,000 employees year-on-year and delivered 15% year-on-year revenue growth. Management also said Quess collected more than Rs 5,000 cr in cash during the quarter, while its overseas business had more than 6,000 associates across over seven countries.
Results were filed after market close
Quess filed these consolidated results after market close on 30 October 2026. The stock's post-results reaction is not covered in this update.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹4,396 cr | ₹4,182 cr | +5.14% |
| Other income | ₹2 cr | ₹26 cr | -92.05% |
| Expenses | ₹4,311 cr | ₹4,097 cr | +5.21% |
| Operating profit | ₹86 cr | ₹85 cr | +1.40% |
| Operating margin (%) | 1.95% | 2.02% | — |
| Interest | ₹14 cr | ₹14 cr | -1.88% |
| Depreciation | ₹9 cr | ₹10 cr | -8.36% |
| Profit before tax | ₹65 cr | ₹86 cr | -24.73% |
| Tax | ₹-10 cr | ₹4 cr | — |
| Net profit | ₹75 cr | ₹82 cr | -9.08% |
| EPS (₹) | ₹5.05 | ₹5.50 | -8.18% |
Operating margin of 1.95% compares with a Services sector median of 21.50% across 25 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Quess’s headcount reached 504,000 after a net addition of 21,000 in Q2.
- General Staffing added more than 20,000 employees year-on-year and delivered 15% revenue growth.
- Quess collected more than ₹5,000 crore in cash during the quarter.
Expansion
- Quess’s overseas business spans more than 6,000 associates across over seven countries.
Competition
- Quess describes itself as India’s largest staffing player.
- Quess describes itself as India’s largest staffing and workforce solutions provider.
What to watch
- Whether operating margin holds above 1.95% after the sequential decline from 2.02%.
- Whether expenses continue to grow faster than revenue after the 5.21% versus 5.14% QoQ increase.
- Whether the tax rate moves back from -15.50% after the Rs 10.02 cr tax benefit.