Brokerages see 30-45% upside in Quess Corp shares on leaner model, CEO says focus is on margins

Quess Corp Ltd

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Brokerages are turning bullish on staffing firm Quess Corp, projecting a 30-45 percent upside in the stock as the company moves to a more focused, asset-light structure following its recent demerger.

Quess’s leadership has said that its streamlined model and a sharper vertical execution as the factors that will drive long-term value.

Quess, a Bengaluru-headquartered company, was trading subdued on June 26 during mid-day trade.

Analysts from IIFL and B&K Securities have assigned target prices of Rs 410 and Rs 453, citing improved margin visibility, return ratios, and capital efficiency in the core staffing business.

“Considering the market dynamics and the industry and what industry is going through. So, from that standpoint, it puts us forward in terms of staying more focused at a vertical level,” Guruprasad Srinivasan, CEO of Quess Corp, told Moneycontrol.

The restructuring has allowed Quess to exit legacy contracts and double down on growth areas like general staffing, professional staffing (especially GCCs), and digital platforms.

FY25 earnings were impacted by a Rs 161 crore one-time provision, which management termed an ‘acceleration of expected credit loss’ to clean up the balance sheet. Despite this, analysts are pricing in a 23 percent compounded annual growth rate in earnings over FY25–28.

Professional staffing, which contributes just 8-9 percent of revenue, now accounts for 23 percent of the company’s bottomline, thanks to high-value GCC mandates, with margins having hit an all-time high of 9.4 percent. The company trades at a discount to peers despite better return ratios and strong free cash flows.

Also Read: Here's why Quess Corp shares plunged over 50% post-demerger

Company Outlook

With strong Return on Equity (RoE) projections at about 20-25 percent by FY27, minimal debt, and focused verticals, Quess is betting that its leaner structure will drive superior shareholder returns.

“We’re not just chasing topline,” said CFO Sushanth Pai. “We’re chasing profitability that outpaces revenue growth.”