Quess Corp Ltd (NSE: QUESS) Q1 2026 Earnings Call dated Jul. 29, 2025
Corporate Participants:
Unidentified Speaker
Kushal Maheshwari — Senior VP of Investor Relations & Strategic Finance
Guruprasad Srinivasan — CEO
Sushanth Pai — Chief Financial Officer
Kapil Joshi — CEO of Quess IT Staffing
Lohit Bhatia — President of India & Global Operations
Analysts:
Unidentified Participant
Siddharth Zabak — Analyst
Dipesh Mehta — Analyst
Chintan Sheth — Analyst
Sankaranarayanan — Analyst
Presentation:
operator
Recorded Foreign. Ladies and gentlemen, good day and welcome to The Quest Corp. Ltd. Q1FY26 earnings conference call hosted by. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Siddharth Zabag from IIFL Capital Service Ltd. Thank you. And over to you ladies and gentlemen.
Siddharth Zabak — Analyst
Good morning and thank you for joining us on the post Q1FY26 results conference call for QuestCorp Limited. It is my pleasure to introduce the senior management team of Questcorp who are here with us today to discuss the research. We have Mr. Guru Prasad Srinivasan, CEO Mr. Prashant, CFO Mr. Kushal Maheshwari, Head Investor Relations and Strategic Finance. Mr. Bhatia, President Indian Google Operations. Mr. Kapi Joshi, CEO West IT Staff Department and Search. We will begin the call with opening remarks by the management team and thereafter.
operator
Sorry to interrupt you that. Actually your voice is breaking.
Siddharth Zabak — Analyst
Is it better now?
Siddharth Zabak — Analyst
No, it’s still breaking. No, now it’s very soft. Can you please check your device?
Siddharth Zabak — Analyst
No.
operator
Can you please speak in a sentence?
Siddharth Zabak — Analyst
We will begin the call with.
operator
Yeah, it’s fine. Thank you.
Siddharth Zabak — Analyst
We will begin the call with opening remarks by the management team and. And thereafter we will open the call for a Q and A session. I would like to now hand over the call to Mr. Kushal Maheshwari to take the proceedings forward. Thank you. And over to you Kushal.
Kushal Maheshwari — Senior VP of Investor Relations & Strategic Finance
Thank you, Sudharth. Good morning everyone and thank you for. Joining our Q1 FY26 earnings call. The information, data and outlook shared by the management during the call is forward looking and subject to prevailing business conditions and government policies. All forward looking statements are subject to economic growth or other risks faced by the company. Please refer to slide number two of investor presentation for the safe harbor clause. With that safe harbor clause I will now hand over the call to our Group CEO Mr. Guru Prasad Srinivasan for his opening remarks. Over to you Guru
Guruprasad Srinivasan — CEO
. Thank you, Kushal. Very good morning everyone and thank you for joining us for Quas Corp’s Q1 FY26 earnings call. I’m pleased to present our first quarter performance which starts the year strongly and builds on the operational momentum and vertical strategy established in FY25. We achieved a healthy and balanced performance in Q1 FY26 despite facing a challenging environment early this quarter, reflecting our resilient business model, disciplined execution and focused client attention. For Q1FY26 we reported a revenue of 3651 crore with EBITDA of 70 crore. EBITDA margins increased by 7 basis points quarter on quarter to 1.9%.
PAT for the quarter was 51 crore. Despite pressure from Headcount additional, we ended the period with 4 61,531 associates, adding nearly 2,000 associates on a net basis. We are proud to announce that Quest has been certified as great place to work for 6th consecutive year, improving from 32nd to 19th place a testament to our people oriented culture. Additionally, we have been recognized as India’s number one staffing company for 2025 by staffing industry Analyst. These prestigious awards highlight our unwavering dedication to our colleagues and consistent quality of our service delivery. Let me now walk you through the performance of each of our segments starting with general staffing.
Signs of Recovery with Strong momentum in June 25 in Q1 the segment reported a revenue of 3,122 crore flat year on year and down marginally quarter on quarter amidst of challenging operating environment. June 25 was the first month since December 24. We saw an uptick across headcount, new demand, open mandates and fulfillments. Overall the quarter we had net adds of 2000 where although we experienced a decline in April, however we saw a recovery in later part of the quarter by adding 6,500 numbers in the month of June itself. The majority of new addition this quarter came from manufacturing followed by banking, financial, consumer retail and telecom.
Consumer Retail Telecom saw a marginal decline. The growth came in from Manufacturing and BFSI. Segment General Staffing added 79 new contracts during the quarter which brought in 9,000 plus new associates as of June 25th. We have an encouraging open mandate of 42,000 considering the upcoming festive season in demand. Moving on to Professional Staffing strongest quarter in over 15 years. Professional staffing maintained its momentum from previous year, posting its best quarterly performance in over 15 years with revenue of 244 crores and EBITDA of 25 crores. It achieved a double digit margin of 10.2% with our annualized revenue run rate approaching 2000 crore.
This success resulted from gross margin expansion, operational efficiency, strong financial governance driven by modern initiatives in systems and processes. While headcount has remained steady, this growth is mainly driven by our targeted focus on niche and super niche skill within the GCC space. Our focused which is our focused Strategy combined with AI in the service delivery excellence has served us as key drivers for the growth. Additionally, over the past two years, even with the headcount remaining stable at around 6,000 segment, EBITDA has doubled highlighting the success of our deployment mix optimization strategy. This margin growth has been driven by ability to shift a large tech workforce from shared services to emerging technology.
With gcc. Our enhanced capability in data and AI, cloud, cybersecurity and platform engineering have allowed us to operate in higher value segment thereby improving our margin profile. GCC expansion within the segment is 73%. The exposure to GCC is 73% driven mainly by demand from digital, high tech, telecom, media and technology and electronic sector. During the quarter we also added 12 new contracts each with promising projection of headcount growth in upcoming quarters. Our open mandate are currently over 1200 positions. I mean positioning us well to meet our demand. From the sector perspective, BFSI continues to drive the growth followed by telecom, product and tech sectors.
Conversely, Pharma and retail, auto and manufacturing face pressure due to tariff related headwinds. We also announced launch of origint powered by Quest, a new strategic business line focused rapidly in expanding GCC ecosystem. Origint provides end to end service to assist global enterprise in establishing, expanding and managing high performing capabilities across India. Moving on to overseas business Stable performance with regional strength the overseas business reported revenue of 284 crores for the quarter flat year on year and marginally down 1% sequentially. Headcount for overseas business was at 5599 with a growth of 18% year on year. We added 32 new contracts during the quarter.
Singapore, our largest international market continues to face visa related challenges that impacts our overall performance. However, our strategic shift towards general staffing in Singapore is now over 300 associates is helping us to offset decline in professional staffing. The Middle east continues to show strong growth driven by headcount increase and better realization. The IT sector remains the main contributor followed by traditional general staffing in retail and E commerce sectors in APAC and Malaysia. In apac, Malaysia is expanding successfully through steady growth in both tech and non tech clients while Philippines had its very strong quarter supported by demand from ITEs to technology sectors moving on to digital platform enabling India’s blue collar workforce at scale.
We are creating a comprehensive digital employment ecosystem through our flagship platform Hamara Jobs. We are proud to be the first company to join the Open network for Digital Commerce which is also called as ONDC as an anchor network participant in the work opportunity domain, making a pioneer step in digital staffing through this integration, Hamara Jobs will continue to contribute over 5 lakh verified job listings annually to ONDC Network, significantly boosting access to trusted, transparent and scalable job opportunities across the country, thereby expanding access for our job seekers and recruiters in tier 2 and tier 3 rural India.
With that now I’ll hand over to Sushant Pai, our Chief Financial officer to share Q1 update on our financial performance. Over to you Sushant.
Sushanth Pai — Chief Financial Officer
Thanks Guru. Very good morning to all of you. I’ll begin by our headline financial numbers before delving into segment wise performance and other corporate updates. We reported revenues of 3,651 crores for the quarter and reflecting a 2% year on year growth and a flat growth sequentially, we delivered an EBITDA of 70 crores which is 10% increase year on year and 4% increase quarter on quarter. Operating margins improved to 1.9% with a sequential expansion of 7 basis points and a 15 basis points improvement over last year. We reported pat profit after tax of 51 crores which includes demerger related expenses of 2 crores and primarily on account of professional fees incurred.
Excluding this, our adjusted profit after tax came at 53 crores, a decrease of 15% quarter on quarter and an increase of 8% year on year. Correspondingly, our adjusted EPS for The quarter is 3.5 rupees per share excluding the interest on income tax refund benefit of 9.7 crores in Q4. The net profit of the business remains stable in line with our stated objective. Our focus on margin expansion has started yielding results due to the operational efficiency measures and a higher mix of higher margin business. From a profitability standpoint, approximately 53% of our contribution comes from general staffing, 29% from professional staffing and about 21% from overseas business.
Professional staffing contribution, which has higher margins has changed from 23% in FY25 to 29% this quarter. We also exited the quarter at zero gross debt levels demonstrating continued strength in our liquidity position. Moving on to segment wise updates starting with general staffing, we delivered a top line of 3122 crores flat year on year and down 1% sequentially primarily due to muted headcount growth. Segmental EBITDA stood at 46 crores, up 3% year on year and 6% quarter on quarter with margins expanding by 9 basis points sequentially and 4 basis points on a year on year basis despite a muted headcount addition.
On professional staffing, we are pleased with the segment’s growth across revenue and realizations as it delivered its best ever quarterly performance. Revenue was 244 crores up 31% year on year and 11% quarter on quarter, while segmental EBITDA increased by 48% year on year and 24% quarter on quarter to 25 crores. The segment margin came at 10.2%, entering double digits for the first time, Registering a sharp 116 basis points expansion with respect to Q1 last year and 102 basis points on a sequential basis. The performance was led by deeper engagements with global Capability centers which now contribute 73% of segment revenues coming to overseas business.
Revenue stood at 284 crores, which is broadly flat Y on y basis and down 1% sequentially as growth in the Middle East, Malaysia and Philippines was offset by decline in Singapore business impacted by continued regulatory headwinds. EBITDA for the segment was 17 crores up by 12% year on year and 1% quarter on quarter segment EBITDA margin is 5.9%, a 30 basis points increase on a year on year basis and 20 basis points down sequentially. Looking ahead as we move into the remainder of FY26, our North Star remains clear which is to drive scalable efficient operations while doubling down on margin accretive avenues.
We will focus on further leveraging the GCC opportunity by advancing our GCC as a service brand origint that was rolled out and accelerate our digital platform’s partnership with ondc. With a strong capital base, a seasoned leadership team and a relentless focus on margin and cash, conversion, Quest is uniquely positioned to capture the next wave of workforce transformation opportunities. With that, I conclude the financial update. Thank you for your time and continued support. I now hand over the call back to the moderator for the Q and A session.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Siddharth Zabak from IIFL Capital Service Ltd. Please go ahead.
Siddharth Zabak
Congratulations on a strong set of numbers and thank you for taking my question. My question is on professional staffing. So you have seen sharp revenue growth and margin expansion in recent quarters. I’d like to understand whether this growth and margin profile is sustainable or should we expect some moderation going ahead.
Kushal Maheshwari
Thank. You Siddharth for your question. I would ask Kapil to answer this question on.
Kapil Joshi
If you see, you know, Querce IT staffing. We closely work currently with 157 GCC in India we have roughly 1800 GCC. So you know last year we have acquired 62 new logo and in the Q1 itself we have acquired 12 new logo. 10 of these 12 are from GCC space only. So as we continue to penetrate in existing GCC base and you know we have actually pivoted from you know, you know, plain vanilla bulk hiding to niche super niche space, we have built the capability to deliver in emerging technology and I think the combination of this continue to help us to improve gross margin as well as give us the top line growth.
Siddharth Zabak
Thank you, that was helpful.
Kapil Joshi
Thank you Sudha.
operator
Thank you. The next question comes from the line of Dipesh Mehta from MK Global. Please go ahead.
Dipesh Mehta
Yeah, a couple of questions starting with first on the general staffing, now general staffing, I think revenue growth is relatively softer. You indicated June month is where you are seeing signs of recovery. So if you can give broad sense how we expect growth acceleration to play out in associate terms as well as in revenue side. If you can give some sense second related question about Essos associate to core ratio if we look at has declined sizably when you look QQY from around 400 to now 300 or so. If you can give some sense about how one should look this ratio and whether it has some margin implication or you think because of business mix change largely it explains the ratio and it might have some implication.
Second question is about professional staffing. Now it has done well. So if you can give us sense about its sustainability both in terms of revenue growth momentum as well as double digit margin kind of thing. Thank you.
Kushal Maheshwari
Thank you Dipesh for your question. For the question on associate to core ratio I would ask Guru to give some guidance on that post which on general staffing lowest will contribute in.
Guruprasad Srinivasan
Sure. So with regard to the code to associate, yes we have seen a decline to 307 from where we were and if you look at in a way we are quite mindful about it and it’s a very cautious step that we have taken. So if you look at Q1 itself we have put across, we have done, we have added about 79,000 headcount during the quarter and of which 31% comes through sourcing and this being a season now July to October up until Diwali it’s going to be season we have gone and ramped up our recruiting capability across.
That’s one and I mean that adds to our headcount. Part B of that is we are also accelerating on our job spots which specifically you know the open mandates which are coming in from manufacturing segment. Q1 it was slightly slow but Q2 we are seeing the mandates coming in and as I said we have about 42,000 open mandates which are lined up and we are accelerating our sourcing capability across up to the season. So that’s pretty much the reason why the quote to associate ratio has slightly come down. But this is definitely going to add back into our net joineries that will impact, that will impact positively in the upcoming quarter.
So I mean does that answer your question? Then I can hand over on what where is the mandate coming in from.
Kushal Maheshwari
Tolohit so broadly what you are indicating it is capacity creation to capture demand, seasonal demand and this ratio likely to reverse as we enter into second half of this year.
Guruprasad Srinivasan
Absolutely. And we have been doing that as and when the season tapers down we also bring it down. The recruiter count also comes down.
Dipesh Mehta
So understand and second part of that question is in terms of mix change because I was more keen about whether this mix change because let’s say BFSA has seen some softness for last few quarters. So now in terms of your associate mix, there might be some change in terms of industry wide number whether it has implication in this core associate kind of ratio.
Guruprasad Srinivasan
Sure. So let me get Lohit to talk about that.
Lohit Bhatia
Yeah. Hi, good morning Dipesh and thanks for the question. You know, just to add to your question and Guru’s answer, first and foremost, if you see the quarter one overall the growth has been a shade over 2000 net addition. However, this is a quarter where we’ve turned from the trough and we’ve turned back up to into the positive territory. You would notice from Guru’s commentary that April started soft with a little over 4,000 negative decline flattish in the month of May and then almost 7,000 net addition in the month of June, which is what has given us the overall 2000 addition.
See quarter one for us particularly is supposed to be the season summer in India and retail and CRT is supposed to do exceptionally well. However, this year monsoon has practically arrived across the country much earlier and we hardly had any practical summer. Even in northern parts of India there was no summer. What that does is that all the manufacturers who are associated with summer products saw a much much softer landing and that did not aid any beneficial incremental growth in the retail segment. Retail among the segments if you notice retail has come out negative in Q1, BFSI which was negative in Q4 and we had reported that separately has turned positive and we’ve added new BFSI customers and M and A has again come out positive.
So that’s overall in the territory. Having said that, the capacity that we’ve created and what we are noticing in the broader economy July onwards we are seeing that we will consistently remain at these kind of June kind of numbers hereafter. Consistently with both new mandates added which is about 42,000 as well as new customers added which is about 79 logo. So going forward we will consistently be able to perform till the season is there.
Kushal Maheshwari
Thank you Lohit. I would ask now Kapil to give. More color on the performance of professional staffing.
Kapil Joshi
Yes. So on your question whether the revenue growth and margin would be sustainable, I think very much we will be able to hold it. Like Guru has mentioned in his opening remarks origint we recently started GCC as a service and you know with execution capability what we have being a differentiator in the market, I think we will be able to capitalize on it. We have healthy pipeline of prospect in origin which should get materialized in next couple of months. Apart from that, you know like I mentioned earlier, we have healthy sales, new logo signed up, we have signed 12 new new logo.
Apart from that we have currently 1200 open mandate which is almost 75 days, you know, work days, you know, for us. So there is a healthy mandate from the GCC also. And then we have made huge investment in our AI driven delivery model. You know, now we are not only helping the world in solving their technology problem but we also use lot of technology internally in getting the sourcing, screening and candidate engagement. And all this is giving us better operational efficiency and better margin.
Guruprasad Srinivasan
Just to add deep what also slight change. If I look at all the high end skills that we are adding whether it is AI, cloud, cyber tech, cyber security, digital and high tech media that we are hiring, the average wage compared to earlier depending upon the skill. Now average wage what we hire a person is almost 1.25 lakhs per month. So even that has increased. And since we work on a percentage margin there, obviously it supports it continues to support the margin expansion for us.
Kushal Maheshwari
Thank you Guru. Thank you Dipesh. Any other questions?
Lohit Bhatia
No, thank you.
operator
Thank you. The next question is from the line of Chintan Shed from Girig Capital. Please go ahead.
Chintan Sheth
Yeah. Hi. Hi team. Thank you for the opportunity and great set of numbers. On the professional staffing side. My question is more on you know general staffing. You provided provided some color around it in terms of how we are, you know looking at it going by what Gumi is offering. You know if you can highlight a little bit more color on in terms. Of. Margin improvement from here on what will be the key drivers one should look at Given you mentioned a little bit about by code has been lower but it will improve and should it also contribute to to improve our margins over there that’s one. And second is you mentioned about the gross level being gross debt level being zero. I’m trying to understand the interest cost at 10 crore seems a little bit higher. So if you can guide on that part.
Kushal Maheshwari
Thank you Chintan for your question. I’ll ask Lohit to give you some sense on the margin improvement possibility in the general staffing business post which Sushant can answer your question on the finance cost related to gross stake.
Lohit Bhatia
Thank you very much Chintan for the question. Margin is a factor of what we get from the industry both in terms of a blend between flat fee as well as percentage fee. And as we’ve explained in the past, some of the deals which come at flat fee have little or no room to play as far as margin expansion expansion is concerned.
But when you see a growing business, we’ve had challenges like Guru put it in his commentary after November 24th which is the last Diwali that we saw, there hasn’t been much addition in the overall general staffing industry per se and those were more related to the environmental factors and the economic factors. If you split it now see some of the things which have changed from April onwards. On the banking side interest rates have substantially come down. There has been more openness towards the NBFCs and the banks to add more people. We’ve added new logos as well as we’ve received more open mandate on the M and A side, the manufacturing side, the ecosystem in electronic manufacturing as well as the automobile and EV and renewal vehicles were also seeing some bit of a slowdown which has also started to recover in both those segments as well.
And that aids our open mandates. And coming back to the retail, what prevented us growing in Q1 which was advancement of rains actually should aid us in growth in second and third quarter because better rains would eventually mean more economic growth and that till this Diwali we are extremely bullish. Now coming back to your specific question on margin service fees minus IDC is what eventually translates into margin. And IDC like Sushant and Guru explained in their commentary has already been baked in. So we have baked in four season of 2025 already ahead of time, which is now.
And that’s what is showing 42,000 open mandates and in the next couple of months that should yield growth back for us. I will hand over my colleague Sushant on the gross debt question.
Sushanth Pai
So on. We are zero at the 30th of June. But what happens is during the quarter and during the months there will be some borrowing. So based on the average debt, the interest cost comes. So typically what happens in month ends and quarter ends we have much higher collections and that sort of helps in the debt position. But during the month the average debt is higher. The second thing, as you have noticed, because general staffing was a bit muted and lot of the general staffing business is on a collect and pay model. And because that business was muted, that sort of affected the operating cash flows in this quarter.
However, as we go along in quarter two, because of the open mandates and because of the general staffing showing better traction in quarter two. So that levels also will help us in quarter two and as we go along, we believe that the interest cost will keep coming coming down. So these are the reasons for the interest costs.
Chintan Sheth
Got it. I’ll jump back into. Thank you.
operator
Thank you. The next question is from the line of Shankar Narayana from I thought pms. Please go ahead.
Sankaranarayanan
Good morning sir. My first question is regarding the ONDC network. So how are you going to differentiate in terms of sourcing capabilities and getting the employees from our peers and the global competitors?
Guruprasad Srinivasan
Sure. Thanks for this question and just let me give a little background. ONDC is a network open digital network for all SMEs and MSMEs to participate on. I mean as a channel to trade, trade and commercial on various other parameters across the country. So this has multiple sections. One of the subsection under ONDC is a platform called Honest which focuses specifically for skilling and employment. Now Quest’s platform getting integrated into ondc which is our platform called Hamara Jobs as an anchor network participant for the work opportunities. So what does this mean to Quest is this opens up a complete network or an area where Quest does not currently focus about.
So for example, we service all enterprise accounts, the large and enterprise accounts. I mean if there are the MSMEs are much larger than the enterprise accounts. So just to give you an example, if a quick restaurant, if a QSR wants to hire people, they can go to ONDC and they can post the job on Onest where the platform would be assisted or the platform that they will ride on is going to be, I mean the demand and supply platform is going to be linked to Quest. So we have candidates coming onto our application on daily basis who are the job seekers and we have people posting job who want to hire.
So it will enable more job matching or job selections in tier 2, tier 3 and rural areas. So this is an area where currently Quest does not focus as an enterprise but MSME is a much larger base for us to accelerate. So as we move forward we would also see a lot of traction coming in from MSMEs onto this platform.
Sankaranarayanan
Got it sir. Sir, my second question is regarding your new business line for GCC. That’s the origint. So previously before the origination of origint how was the GCC business vertical was structured and after this introducing new vertical as a new business line how it’s going to transform our existing business, how is going to improve us.
Guruprasad Srinivasan
So as I called out in my initial speech, we have been in IT staffing specifically for over last 15 years and we have been hiring people for IT IT years and GCC. So we have been doing that and we have been doing fairly well for last 15 years and you have seen the result. The toughest part for somebody to set up GCC in India one of the heavy lifting element is hiring and we have been doing that for long naturally it’s a good fit in for us to get into the other plugin services. So for example hiring is one part that we are good at.
So the other part is end to end services in terms of finding infrastructure and managing those infrastructures for our customers. So we did that as a natural plugin, created this brand called Origent and now we have a capacity that we have built where we can pitch into customers to do end to end getting them to I mean if somebody is setting up their shop in India we can tell them where the talent is available because we have enormous data in that zone as to what kind of like we know where the healthcare tech talents are available where high end niche IT talents are available across we’ll be able to consult and coach customers for setting up their shop here, which geography or where they should set up considering the talent availability and help them to accelerate the entire startup in much more faster faster way by setting up end to end infrastructure premises as well.
So all the, I mean again these are not capex heavy model, these are you know cost plus markup model and since we have the capability to manage end to end through our own you know company which is blue Spring and digitized so we can bring all of Them together to work on this. So what have we done till now? We have gone live with one of the healthcare wearable company and there are two more in pipeline which we are working on. So there is a sales strategy that we have put across together.
Sankaranarayanan
Got it sir. So my last question is regarding general staffing. So I could congratulate the management for increasing the collect and pay ratio from 50 to 65 percentage in 2018 to 76. Now sir, from here on how long could you increase the collect and pay ratio in the overall general staffing segment?
Sushanth Pai
So thanks for that question. The propensity for the customer to pay either collect and pay or credit depends on their cycle. And some of the cases where the credit is being given is because their cycle is pretty international. So the operations may be in India but their shared services or their global operations which could have some of the approving path and everything could be housed outside of India and hence it takes slightly longer for us. The most important thing is even in the customers where we give credit, the due diligence on the type of client and and the safety of capital is there.
I think we’ve often stated that we are happy keeping it between 75 to 80% and will remain in that range. As far as the general staffing is concerned, our first potential is always to bag more relationships in collect and pay. However, we will remain in that range.
Sankaranarayanan
Got it sir. Thank you sir. Best of luck.
Sushanth Pai
Thank you.
operator
Thank you. The next question is from the line of meat from Aquarius pms. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity. Am I audible?
operator
Yes. Yes.
Unidentified Participant
Yeah. So my first question is in terms of construction vertical within general staffing. So what was the absolute headcount number for this vertical as on June end and what was the headcount growth in Q1 on QoQ basis?
Sushanth Pai
Yeah, thanks for the question. Meet. Construction, as you know is one of India’s biggest informal labor market. It’s estimated that There are about 50 million people who are in the construction vertical and 95 to 97% by government’s own data could be in the informal sector. We, along with our board of directors and leaders felt that this is an area that we can have critical operations. However, construction also has other inherent layers in it. So as an organization we are being extremely cautious. Today we play and work in this segment with only three very large marquee construction giants in the country.
While we have multiple projects that we are doing with them. But the legal entities are three. The SPVs under them or the construction sites could be about 30 of them. The actual headcount from this business is just about between two and a half to 3,000. Again this is a business which gets highly impacted by rains and you know, you can’t construct especially civil, you cannot construct when there are rains. So obviously there’s a little bit of A in our plan the way we had planned. We are ahead of the plan in Q1 already in construction though not much growth over Q4 because of the reason that I just explained Q2 and Q3.
We have uptick in this business as per the plan itself today. What does it contribute to the group? I would say it’s fairly insignificant when it comes to cash, bottom line. But it has upside potential towards the end of this financial year.
Unidentified Participant
Okay, okay. Any color how much it can contribute to general staffing revenue and EBITDA in let’s say FY26 or FY27 early days.
Sushanth Pai
To make that comment. But I will make one point that unlike the general staffing flat service fees business, this is more like a big rate model, more like a professional staffing because the nicheness of the profile to get skilled workers on the site and to have them mobilized across the country is what customers pay for. They also know that when they come to a Quest Corp, they get good talent, quality talent and they get extremely good compliances and governance which is otherwise not available in this industry. To give you one perspective, the gross margins in this can be, you know, three to four times the gross margin of a typical general staffing person applied.
So but it is a, it is a long way forward for us. We are still very, very small in this right now.
Unidentified Participant
Understood, understood. And any new major project which we are pursuing as of now, apart from the three ongoing projects, right now we are focusing on three projects for this year.
Sushanth Pai
For now we’ll continue to focus on three customers which are India’s giants but multiple projects under them and we will continue to see that, you know, it aids us both in, you know, payables as well as it aids us in margin profile.
Unidentified Participant
Understood, got it. And my second question is for the ELA scheme. So Cabinet has approved the employee employment linked incentive scheme earlier in July which was presented in union budget. So just wanted to understand what is your assessment about the impact of this scheme on staffing industry.
Guruprasad Srinivasan
So yeah, that’s a good question. And it was announced in the budget, it’s been approved by cabinet on 1st of August, it goes live for the entire country for the next two to four years. As we’ve all read the details on the 5th of August, the fine print and the rules should be given out. However, our teams are working extremely closely with both Ministry of Labour as well as the Employees Provident Fund organization, which is the implementation body for this. You know, at a very high level, I’ll tell you, it will lead to three or four things for the entire industry.
One more informal labor market should come towards formal labor market, which is where Quest operates and that helps us. Second, even after we do the transition from informal to formal labor market, unfortunately at the entry level, retention is a very big problem. And attrition is very high in the general staffing business. The way the scheme is drafted, if you specifically look at scheme 8, it now says that the DBT benefit to the employee will happen after completing 6th month and 12th month. This staffing industry and for most of our customers will not just allow more attraction of people into the labor market and into the staffing industry.
It will also help us in retention. So retention is going to be another area where we will closely be able to work. And this will help both us as well as our customer. And third, obviously it helps the employers as well. And we are a large job creator. So automatically there would be some benefits there as well. The modeling of it is little early right now as we cross say 1/4 and we see our gross additions and net additions, maybe we’ll be able to guide more closely after the September or the December quarter in terms of real cash flow.
If you see it, it’s safe that six month after the implementation and implementation date, starting from the 1st of August, it will start having a cash flow benefit to employers. That means the benefit can only accrue from the quarter fourth.
Unidentified Participant
Understood? Understood. Okay. Any early assessment of maybe gross margin changes with the employers because of this scheme?
Sushanth Pai
Like we said, this is Sushant here. The framework is just ready. There are still fine print that we need to go through. The rules like Lohit said is expected to come soon. I think only after that we’ll be able to comment. But broadly, because this takes place in August and there is a condition that people have to be in employment for minimum six months, we believe it will be insignificant for this financial year.
Unidentified Participant
Understood. Thanks for answering my questions. Thank you.
operator
Thank you. The next question is from the line of Karan Gupta from asml. Please go ahead.
Unidentified Participant
Yeah, hi. Yeah, so just quickly, can you give a guidance overall 26, 27 of top line and margins.
Kushal Maheshwari
Sorry, Karan, your line was not audible. Can you be. Can you repeat your question?
Unidentified Participant
Yeah. So any guidance for top line and margins? For respect 26, 27
Sushanth Pai
karan we typically. Don’T give guidance for top line bottom line we can discuss more on the business lines. If you have any questions on the business line we can discuss more on that.
Unidentified Participant
Okay. So for professional staffing, what the contribution we are targeting the overall pie.
Sushanth Pai
For professional staffing.
Unidentified Participant
You’re saying professional staffing as a professional.
Guruprasad Srinivasan
Staffing India in terms of ebitda it contributes 29%.
Unidentified Participant
Oh for the profess.
operator
Sorry to interrupt you. Actually there is lot of disturbance from your background.
Sushanth Pai
So you know k professional staffing, you know now in terms of revenue revenues contribute about 7% and to EBITDA it contributes 29% and the margin profile of the professional staffing business is about 10.2%.
Kushal Maheshwari
Any other question Karat?
Unidentified Participant
Yes. Any guidance of this segment to increase what will be the overall contribution on top line?
Kushal Maheshwari
Already answered the question on revenue and margins. But I would ask Kapil if he can give some more color on the business to professional staffing business.
Kapil Joshi
Professional staffing business Europe we have done the verticalization long back. It was almost 10 years back when GCC was just getting the traction and we had early movers advantage of having a verticalization as well as industry focus delivery approach. Okay. Recently we have invested a lot in AI driven delivery model and that has helped us to deliver better with the speed, better quality to GCC and has helped us to consolidate our position in GCC space. Now 73% of our revenue come from the GCC and you know with healthy new logo pipeline and with the 1200 open mandate currently we expect, you know this growth should continue.
Unidentified Participant
Okay. Okay. Yeah. So just last one on overseas staffing she just give some color on the margin side of overseas staffing. I mean how should we look at it as compared to the staffing professional staffing? Why the Singapore country continues to face challenges during the climb down.
Sushanth Pai
Thank you, thanks for that question. Maybe I’ll just give a headline thing and I’ll just pass it on to Lohit. So if you see overseas business our contribution to revenue is about 8% and you know EBITDA is about 17%. The contribution is about 20% to EBITDA it makes close to 6% margins. So broadly if you see the margins the way it is shaped up is grown 12% year on year for overseas business. This is despite Singapore having headwinds. That is also because Middle East Malaysia have shown good growth here. And you can also see the headcount has grown about 18% year on year for overseas business.
So that’s the broad thing. So we believe these sort of trends will continue as we go along. And I’ll just hand it over to Lohit to add on any comments?
Lohit Bhatia
Yeah. Thanks, Sushant. I think, as is known to almost everyone, that the Singapore was our largest contributing book from a headcount, perspective, revenue perspective and margin perspective. The headwinds that we are seeing there in the last eight quarters have been circumvented by a couple of actions that our business teams have taken. One among them was to ensure that we have tremendous diversification across all the existing geographies that we had. While Singapore’s EBITDA came down in the last one year by 41%, you’d be glad to know that Middle East EBITDA went up by 48%, Malaysia went up by almost 100% on its base and Philippines went up by 56% on its base.
Singapore, I’d again repeat, used to be our largest contributor. It is no longer our largest contributor. Now the largest contributor by EBITDA is Middle East. So first that diversification for us across our own geos have worked. Second, within Singapore itself, like Guru explained, the headwinds were primarily because of the visa issues and hence we doubled down in the last couple of quarters on expanding towards more localized business, which is general staffing business. Glad to again report that our teams have been able to cross 300 headcount though on a lower papam basis. But they have done significant work locally in Singapore.
The third action that we took was from a sales point of view. We started to sign more APAC deals and more inter country deals rather than single country deals, which has also helped some of the other geographies to get marquee customers in their geographies and be able to deliver to them. Our exit EBITDA as of now stands at about 5.9% blended for international. Karan, hope this answers your question.
Unidentified Participant
Yeah, thanks. Thanks. Thank you very much.
operator
Thank you. The next question is from the line of Soham from RV Investments. Please go ahead. Sir, your voice is very soft. Can you please speak?
Unidentified Participant
Am I audible now?
operator
Yes, yes, you are audible now, sir.
Unidentified Participant
What was the gross margin PAPM in the general staffing and professional shopping business?
Kushal Maheshwari
Thank you. So for your question, I’ll ask Guru to ask this.
Guruprasad Srinivasan
Yeah. So PAPM ranges between about 600 to 650 rupees. That’s the range that we are in. So if it is seasonal then you know, I mean Q1 was lesser addition. So it is in a range of about 600. And as we do net adds in Q2 it’s going to slightly, you know so that’s the range that PAPM for general staffing looks in. Typically we don’t look at PAPM for specifically for IT staffing because they work on a bill rate model and but just to give you a ballpark number it ranges anywhere between 23 to 25k per person.
Unidentified Participant
Okay sir and this new vertical which we have launched that origint. So it will be reported under our professional shopping business. Yes it will be part of professional staffing because it’s an extension of that. And sir like you said that we were already good in hiring part and now we will be providing end to end services. So how will it impact our margins? Like will we increase it? How are you looking at it?
Sushanth Pai
Margin would definitely continue to be healthy there blended we should be still be able to deliver a double digit EBITDA margin. So because these are I mean GCC is a value accretive business and will continue to be a early double digit EBITDA margin.
Unidentified Participant
So sir, internally how big are we seeing this origin line go on a revenue basis like in 2, 3 years with the increasing.
Guruprasad Srinivasan
Currently India has about 1600 GCCs. By 2030 it is expected to grow at a rate of about 13% and another 700 plus GCC GCC are expected to go live. So on an average roughly about 100/ GCCs are going to go live. That’s what majority of the reports and research talks about and which will also employ substantial headcount that needs to come in there the talent that needs to be hired for balance 700. So definitely there is an opportunity and it’s too early to put a number as to what percentage of that we would be delivering but definitely quest has a good opportunity to be in that space.
Unidentified Participant
Okay sir and this will be completely like asset light only you know this line.
Guruprasad Srinivasan
Yes, yes, yes absolutely yes sir.
Unidentified Participant
And this 1200 open minded we are talking in the professional staffing like if you can provide me the percentage of how many are from GCCs
Guruprasad Srinivasan
68% almost. Are from GCCs of the 1200.
Unidentified Participant
Okay sir, thank you sir like and any, any north star margin you are expecting from the GCC margins like sir.
Guruprasad Srinivasan
No I think, I mean pretty much. Sorry, please comment now you got Sir. I said I mean we are expecting continue to sustain this double digit margin for professional staffing.
Unidentified Participant
Okay thank you, that was helpful.
operator
Ladies and gentlemen we will take that as a last question. I now hand the conference over to the management for closing comments.
Kushal Maheshwari
Thank you. Thank you the moderator. I would ask Guru to give a closing statement.
Guruprasad Srinivasan
Sure. So as we strengthen our position as a pure place staffing leader, we remain deeply committed to operational excellence, innovation and continuously evolving our offerings to meet the dynamic needs of our clients. It takes a very disciplined approach in terms of execution, a clear strategic vision in terms of robust balance sheet and culture, a deep rooted culture on innovation. We’ll continue to invest in technology in both of our in all our parts of business and there are multiple work that we are doing in that space. So we believe Quest is well positioned to drive sustainable long term value for our shareholders.
Thanks again for joining us today in Q1 earthings call. Your question and feedback has always been valuable. We appreciate your continued interest and support and I sincerely look forward to catching up with you all soon. Thank you. Thank you very much.
Kushal Maheshwari
Thank you.
operator
Thank you. Ladies and gentlemen, on behalf of Quest Corp. And IIFL Capital Services Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.