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

Bengaluru, June 26, 2025 — Quess Corp Ltd, one of India’s leading business services providers, has caught the eye of several top brokerages, with analysts forecasting a 30–45% upside in the company’s stock price over the next 12–18 months. This bullish sentiment comes on the back of the company’s ongoing transformation into a leaner, more margin-focused organization under the leadership of CEO Guruprasad Srinivasan.

Strategic Transformation in Focus

Over the past year, Quess Corp has undertaken a significant operational revamp aimed at improving profitability and sharpening focus on high-margin segments. The Bengaluru-based staffing and workforce management giant, which operates across HR services, facility management, and technology solutions, has been streamlining its business portfolio and optimizing costs.

In a recent interview, CEO Guruprasad Srinivasan said, “Our strategy has moved from chasing volumes to protecting and enhancing margins. We are focusing on quality of revenue rather than just quantity. The idea is to build a structurally stronger and more agile business that can deliver sustainable returns.”

Quess has exited non-core verticals, restructured loss-making subsidiaries, and consolidated operations across multiple business units. According to the CEO, these moves are already yielding results in terms of improved EBITDA margins and better cash flow visibility.

Brokerage Upgrades and Target Revisions

Leading brokerages including ICICI Securities, Axis Capital, and HDFC Securities have issued optimistic reports on the company. ICICI Securities recently upgraded the stock to a ‘Buy’ rating with a 12-month target price of ₹875, representing a 40% upside from its current level of around ₹620.

“Quess Corp is emerging leaner and stronger. With an improved focus on cost efficiencies, automation, and high-margin segments like IT staffing and facility management, we believe earnings upgrades are likely in FY26,” said an analyst at ICICI Securities.

Similarly, Axis Capital sees a 45% upside potential, citing the company’s improving return ratios and consistent deleveraging. “The company has reduced working capital intensity, sharpened focus on profitable contracts, and is maintaining capital discipline,” the brokerage said in a recent note.

Recent Financial Performance

In Q4 FY25, Quess Corp reported consolidated revenues of ₹4,482 crore, a marginal year-on-year increase. However, EBITDA grew 17% YoY to ₹241 crore, and EBITDA margin improved to 5.4% from 4.7% in the year-ago period — a clear reflection of the company’s shift toward a more margin-conscious approach.

Net profit stood at ₹102 crore, up from ₹73 crore in Q4 FY24. The company has also seen strong growth in IT staffing and digital services, contributing to the margin uplift.

“FY25 has been a year of reset for us,” said CFO Manish Sharma. “We’ve been disciplined in project selection, brought down operating expenses, and ensured better collections. These efficiencies are starting to reflect in our bottom line.”

Industry Tailwinds and Market Context

India’s formal staffing and outsourcing industry is poised for growth, buoyed by increasing demand for flexible workforce solutions and higher formalization of the labor market. Quess, with its scale and diversified offerings, is well-positioned to benefit from this structural tailwind.

“Companies across sectors are looking to manage costs post-pandemic, and Quess’ value proposition in staffing, managed services, and HR tech is becoming more relevant,” said Shruti Menon, senior analyst at Prabhudas Lilladher.

The broader mid-cap IT and services segment has also seen renewed investor interest in 2025, with improving global macro indicators and favorable exchange rates for Indian exporters. Against this backdrop, Quess stands out as a diversified play in the digital transformation and manpower management space.

Investor Outlook: More Than Just a Rebound

While the stock had underperformed in 2023 and early 2024 due to structural issues and sector-wide concerns, the current momentum indicates a re-rating could be underway. Over the last three months, Quess shares have climbed nearly 18%, outperforming the Nifty Midcap 100 index.

“With improved earnings visibility, potential for margin expansion, and a focus on return on equity (RoE), Quess Corp is transitioning from a volume-driven to a value-driven business,” said Vaibhav Jain, Fund Manager at Navi AMC. “The market is recognizing this change, and the next few quarters could be a turning point.”

Long-term investors are advised to keep an eye on execution risks, particularly in integration and client retention, but most agree that the direction is positive. The company’s guidance for FY26 includes further improvement in margins and a potential dividend increase, adding another layer of appeal for institutional buyers.

Quess Corp’s strategic shift towards a leaner, margin-focused model is earning investor confidence, with multiple brokerages revising targets upward. As the company enters a new growth phase with sharper execution and stronger fundamentals, analysts believe the stock may offer attractive returns in the medium term.