Quess Corp (QUESS) Q2 24/25 earnings summary

Executive summary

• Achieved a headcount milestone of over 600,000, doubling since FY 2021, reinforcing leadership in India's business services sector and celebrating its 17th anniversary.

• Quarterly consolidated revenue reached INR 5,179 crore (INR 51,793.62 million), up 9% year-on-year, with EBITDA at INR 196 crore (INR 2,305.30 million), up 16% year-on-year.

• Net profit for the quarter was INR 94 crore (INR 936.24 million), up 32% year-on-year, with EPS at INR 6.1, up 26% year-on-year.

• Progressing on a three-way demerger, with NCLT first motion completed and shareholder meetings scheduled; Board approved scheme to create Digitide and Bluspring.

• Strategic investments in people, technology, and verticalization to drive future growth and prepare for the demerger.

Financial highlights

• Q2 FY25 consolidated revenue at INR 5,179 crore, up 9% year-on-year; EBITDA at INR 196 crore, up 16% year-on-year; PAT at INR 94 crore, up 32% year-on-year.

• H1 FY25 revenue at INR 10,182 crore, up 9% year-on-year; EBITDA at INR 384 crore, up 17% year-on-year; margin improved by 27 bps to 3.8%.

• EPS for Q2 at INR 6.1, up 26% year-on-year; H1 EPS at INR 13, up 63% year-on-year.

• Net cash position at INR 334 crore, gross debt reduced to INR 253 crore, with INR 117 crore repaid in H1.

• Net cash from operating activities for H1 was INR 3,437.25 million; OCF to EBITDA conversion at 86%.

Outlook and guidance

• Expecting margin improvement in H2, targeting a move from 3.8% to 4% as high-margin businesses recover.

• Demerger targeted for completion by Q1 FY26, aiming to unlock value and enhance strategic focus.

• Management maintains its position on key tax deductions and expects favorable resolution; ongoing appeals on tax and provident fund matters.

• Confident in continued growth in headcount and revenue, especially in manufacturing and technology verticals.

• Anticipate break-even for foundit platform by Q4, with further reduction in cash burn.