Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Quess Corp Ltd (NSE: QUESS) Q4 2026 Earnings Call dated May. 05, 2026
Corporate Participants:
Siddharth Zabak — Moderator
Kushal Maheshwari — Head Treasury & Investor Relations and Strategic Finance
Louis Bhatia — President of India and Global Operations
Neeraj Jain — Chief Financial Officer
Nitin Dave — Chief Executive Officer Quess Staffing Solutions
Kapil Joshi — Chief Executive Officer Quess IT Staffing
Analysts:
Amit Chandra — Analyst
Unidentified Participant
Dipesh Mehta — Analyst
Sankaranarayanan S — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the QuestCorp Q4FY26 earnings conference call hosted by IIFL Capital Services Ltd. 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 this conference call, please signal an operator by pressing then 0 on your Touchstone 4. Please note that this conference is being recorded. I now hand the conference over to Mr.
Siddhan Tabak from IFL Capital Services Ltd. Thank you. And over to you sir.
Siddharth Zabak — Moderator
Thank you. Ladies and gentlemen, good morning and thank you for joining us on the post Q4, FY26 and FY26 results conference call for QuestCorp Limited it is my pleasure to introduce the senior management team of Quest Corp. Who are here with us today to discuss the results. We have Nishal Gurupa Tatsuiniwatan, Executive Director, Mr. Louis Bhatia, CEO Mr. Kushal Manishwari, Head Investor Relations and Treasury, Mr. Neeta Jain, CFO Mr. Kapil Joshi, CEO of Square IT Staffing and Mr. Nitin Dade, CEO of Square Staffing Solutions.
We will begin the call with opening remarks by the management team and thereafter we will open the call for the presentation. I would like to now hand over the call to Mr. Khush Nharejwari to take the proceedings forward. Thank you. And over to you.
Kushal Maheshwari — Head Treasury & Investor Relations and Strategic Finance
Thank you, Siddharth. Good morning everyone and thank you for joining us for our Q4 FY26 and FY26 earnings call. The information, data and outlook shared by the management during the call are 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 the investor presentation for the safe harbor clause. With that straightforward clause I will now hand over the call to our CEO Mr.
Lohit Bhatia for his opening statements. Over to you Lohit.
Louis Bhatia — President of India and Global Operations
Thank you Kushal. Good morning everyone and thank you for joining us for QuestCorp’s Q4 and full year FY26 earnings call. Today we are pleased to report a quarter of year with steady execution, strong margin expansion and improved quality of earnings. For Q4FY26 we delivered a revenue of 3,892 crores reflecting a 6% year on year growth while the EBITDA came in at 86 crores up 28% year on year with the margins expanding to 2.2%. PAC stood at 64 crore with an EPS of 4.3 rupees for the full year, FY26 revenues stand at 15,305 crores with an EBITDA at 3,112 crores reflecting 19% growth in EBITDA and a PAT excluding one time exceptional item at 230 crores.
Up 10% year on year this marks a healthy ROE of 20%. Importantly, our EBITDA to operating cash flow conversion remains strong at 80% highlighting the disciplined working capital management and high quality earnings. The Board has thus approved a special dividend of per share on account of the 10th anniversary of our IPO and a final dividend of 3 rupees per share, staying true to our commitments to reward our shareholders. Now moving to the business performance, this is scale with improving quality.
FY26 reflects a clear shift in our business towards higher margin more sustainable segments Even as we maintained our leadership position in co staffing, we ended the year with a headcount of approximately 4,78,594 associates reinforcing our position as India’s largest staffing platform. During the year we added 281 new contracts in general staffing, continued scaling high margin professional staffing with strong GCC traction, adding 61 new logos during the year we added 125 new logos in overseas business as well.
At a portfolio level, high margin businesses now contribute 50% of the total profitability, a structural shift that is beginning to reflect in our margin trajectory as well. General Staffing Scale Leadership with Execution discipline the general staffing business continued to demonstrate resilience and strong execution at scale. For the year FY26 we added approximately 26,000 net add in our headcount in the staffing solutions business. However, discontinued projects have resulted in a 7,000 loss during the year as well.
Revenue has come out at 13,176 crore growing modestly year on year. Despite a year marked by structural transitions including the labor code implementation, the geopolitical instability and portfolio recalibration, EBITDA remains stable at 189 crore with significant investments made in verticalization, technology investments and hiring of recruiters to make our business future proof and Future ready. During Q4 we added 59 new contracts taking FY26 total addition of new contracts and customers to 281.
The headcount growth remained measured owing to global factors and supply side talent shrinkage especially in the later part of the financial year. DSO remained tightly managed at 24 days including 9 days of UBR days as well. This also shows strong collection discipline within the unit while certain verticals such as BFSI and CRT saw near term softness. This was offset by the stability in other lines of businesses recently created in the last few years including manufacturing and the infrastructure led construction demand.
Our focus will continue to be improving profit per associate, enhancing client mix, driving operational efficiency at scale Moving to our Professional Staffing business the high quality growth engine Professional staffing has delivered another record strong quarter for us and a year of profitable growth. The revenue for the year has come out at 930 crores which is up 13% year on year. EBITDA increased sharply to 111 crores up 43% year on year. Margins have expanded to 12% plus in the quarter four EBITDA has grown 47% year on year with continued margin strength.
GCCS continue to account for 71% of total headcount deployment in our professional staffing business reflecting our strategic position in high value niche roles and segments. This performance has been driven by the focus on high margin digital and technology roles, rationalization of low yield engagements, strong demand from GCCs. We believe the double digit margin in this segment are sustainable supported by the structural demand and disciplined execution. Moving to our overseas business Diversified growth with margin expansion Our overseas business continued to deliver consistent growth and improving margin for the year FY26 the revenue stands at 1,197 crores up 5% year on year.
EBITDA increased to 77 crores up 21% year on year for the quarter four revenue grew 16% year on year. EBITda grew 28% year on year with steady margins above 6% at a blended rate. The key highlights for International are 125 new logos added during the year. Middle east has closed financial year 26 with 11% EBITDA margin posting revenue and EBITDA growth of 27 and 40% respectively. Quest Singapore General Staffing has added 68 new contracts and an over 491 local headcount, taking our total headcount in in the geography to over 1,026.
Malaysia has delivered strong revenue growth of 83% year on year scaling to 900 headcount and an EBITDA margin of 4.3%. Philippines posted 49% revenue growth at a 10% EBITDA margin, crossing over 700 headcount milestones. Overall, the international portfolio is now better balanced, structurally more profitable as well. Our digital platforms continue to remain investment focused with a layer of AI. Our digital platforms businesses continue to be in an investment focus we have sharpened our focus towards AI led solutions with a plan for the coming three years.
We are building a blue collar marketplace, AI driven recruitment and workforce solutions. This will further strengthen our long term position in technology led workforce management platform. Moving on to people and ESG Highlights I’m proud to share that Quest has been certified as a great place to Work for seventh consecutive year with recognition across India, Singapore and Middle East. We were also recognized with LinkedIn Talent Award 2025 for AI Pioneer reflecting our focus on innovation in talent acquisition.
Some closing remarks to summarize the FY26 the year has been led by margin expansion, improved profitability, strong cash flow generation portfolio shift towards higher margin businesses, disciplined execution across segments. While revenue growth remained moderate, the quality of growth has significantly improved positioning us well for the next phase. As we move into FY27 our focus will be on scaling professional staffing and overseas business drive margin expansion across segments, leveraging technology and AI platforms and continuing our disciplined capital allocation.
We remain confident in our ability to deliver sustainable, profitable growth with improving return ratios. With that, I will now hand over to Neeraj to walk you through the financials in more details. Thank you,
Neeraj Jain — Chief Financial Officer
Thank you Lorit Good morning everyone and thank you for joining us for QuestCorp Q4 and full year FY26 earnings call. I will begin with our headline financial performance for the quarter and full year and then I’ll follow with a segment wise financial review and conclude it with key balance sheet cash flow and capital allocation highlights. I’ll start with financial highlights for the quarter Q4 FY26 was a quarter of strong margin expansion, improved profitability reflecting continued benefits from our focus on mix improvement, operating discipline and cost optimization.
Our consolidated revenues for the quarter stood at 3,892 crore representing 6% year on year growth with broadly stable sequential performance. EBITDA for the quarter came in at 86 crore, up 28% year on year and 8% sequentially with EBITDA margins improving to 2.2% representing an expansion of 37 basis points year on year. This margin expansion indicates improved operating leverage, a more favorable business mix and sustained cost discipline across the organization, reflecting in operating margins for all businesses combined and crossing 100 crore for the quarter.
Reported pad stood at 64 crore reflecting a 167% year increase supported by operating leverage and lower exceptional impacts. On an adjusted basis, PAT remained stable sequentially reflecting underlying business trend and consistency in earnings quality. Our EPS for the quarter stood at 4.3 per share. Importantly, our operating cash flow conversion remained robust at 80% of EBITDA, underscoring strong working capital discipline and high quality earnings. I’ll come to full year FY26 performance. For the full year FY26 consolidated revenue stood at 15,305 crore reflecting 2% year on year growth.
While revenue growth remained calibrated during the year, the financial performance reflects a deliberate focus on profitability and earnings quality rather than volume. Net expansion EBITDA increased to 312 crore delivering a 19% year on year. Year on year growth with a margin expansion to 2%. Our adjusted pad for the year stood at 250 crore up 10% year on year with adjusted EPS of 15.4 per share. Our return on equity remained strong at 20% reflecting improving profitability and capital efficiency.
This reflects disciplined execution in a year of external transitions particularly around labour code implementation. I’ll now talk about segment wise Financial Performance Journal staffing scale with stable profitability. Our general staffing continues to provide scale stability and strong cash flow generation even as margins remain sensitive to mix and sectoral demand. For quarter four FY26 our revenue stood at 3328 crore up 6% year on year while quarter on quarter decline is due to one time incentive pass through and gratuity billing.
In Q3 which was because of the labor code implementation, our segment EBITDA stood at 52 crore reflecting 21% year on year growth. And for FY26 our revenue stood at 13,176 crore contributing 86% of total revenue for the company. Our EBITDA stood at 189 crore for the segment. Operationally we added 59 new contracts in Q4 taking our total FY26 additions of new contracts to 281. Our DSO remained tightly controlled at 24 days including unbilled revenue. With the AR DSO standing at 15 days. Our collect and pay mix remained strong at 76%.
Our margins remained stable supported by pricing discipline and cost control even as certain verticals such as BFSI and CRT saw moderate softness. I’ll now talk about professional staffing. I think the highlight for the segment was margin led growth continues. Professional staffing continues to be our key driver for profitability and margin expansion. For quarter four FY26 the revenue stood at 232 crore. The EBITDA stood at 30 crore which is up by 47% year on year and margins for professional staffing remained strong at 12% plus for the full year.
Revenue grew to 930 crore which is 13% year on year growth and EBITDA increased to 111 crore which is a 43% year on year increase. Key highlights for the segment GCC led engagements now account for 70% plus head count. Our continued focus on high margin digital and technology roles and strong operating leverage driven by portfolio rationalization, Professional staffing now contributes a high share of profitability relative to revenue, reinforcing its role as our structural margin driver for the company.
I’ll move on to the overseas business. The overseas business delivered steady growth with continued margin improvement supported by diversification across geographies. Starting with Q4, our revenue stood at 332 crore which is up by 16% year on year. Our EBITDA was at 21 crore which is up by 18% year on year and for the full year revenue for overseas business is 1,197 crore and our EBITDA increased to 77 crore which is a 21% year on year increase. Moving on to operational highlights, we added 125 new logos during the year and Middle east maintained double digit margins.
Malaysia and Philippines showed strong growth and margin expansion and Singapore performance stabilized during the year. With improved revenue mix and cost efficiency, the segment continues to demonstrate improving profitability and cash generation with EBITDA margins in the range of 6% to 7%. These results demonstrate consistent sequential execution and margin sustainability during the year. Our portfolio mix and margin evolution From a portfolio perspective, approximately now 50% of the total operating profitability comes from high margin businesses, namely professional staffing and overseas segments.
This structural shift in mix combined with cost discipline and pricing optimization, improved execution has been the primary driver of margin expansion for us during the year. The impact of this mix improvement, complemented by cost management and delivery efficiencies has been our key driver for margin expansion during the year. Importantly, this strategy has been executed without compromising our cash flows and with strong focus on capital efficiency and liquidity discipline. I’ll move on now to balance sheet, cash flow and capital allocation.
Our balance sheet remains strong and well capitalized. The net cash position as of close is 271crore. We have zero gross debt in the company. Our free cash flow generation remains healthy supported by strong EBITDA growth and tight working capital management. Talking about capital allocation and shareholders return based on our cash generation and balance sheet, the Board has proposed a final dividend of 3 rupees along with a special dividend of marking our 10 years of IPO. This reflects confidence in our cash generation and our commitment to shareholder returns.
Continued discipline in capital allocation this translates into a total payout aligned with free cash flow, reflecting our commitment to shareholder returns while maintaining adequate liquidity for our growth objectives. In closing remarks, to summarize, Q4 and FY26 consistent margin expansion despite modest revenue growth, strong EBITDA and profitability growth, high quality earnings with robust cash conversion, structurally improving our business mix and a strong balance sheet with disciplined capital allocation.
As we move into FY27, our financial priorities remain sustaining our margin expansion trajectory while maintaining strong cash conversion, driving higher return on capital and supporting growth investment while ensuring capital discipline. With that, I will now hand it over back to the moderator for Q and A.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and then one on the Redstone telephone. If you wish to remove yourself from the question queue, you may press Star and then two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question disables. A reminder to all. You may press Star and then one to ask a question. We will take the first question from the line of Siddharth Savak from IFL Capital Services Ltd.
Please go ahead.
Siddharth Zabak
Thank you. Congratulations on a strong set of results and thank you for taking my question. I have two questions. Firstly on the overseas business we saw a startup within Tofu. Could you help us understand what was the drivers behind this growth and to walk to what extent is this sustainable versus being one off in nature? Additionally, any color on how the Middle east business will be impacted by the ongoing geopolitical situation. And secondly on general staffing margins, margins expanded by 20 basis points year on year.
What are the key drivers behind this increment and should we view this level of margins as sustainable going forward?
Louis Bhatia
Thank you Siddharth. This is Lohit here. I will take that question and then hand over briefly to my colleague. Your first question was on overseas and how sustainable is the margin profile and the growth that we’ve seen in the fourth quarter? Fourth quarter has been particularly aided by the revenue jump from 290 crores to 332 crores. This is actually demonstrated by three moving parts and segments. Number one is core organic revenue growth as well as one time pass through put together that has expanded the book.
The second has been expanded by New Customer edition during this quarter as well. And third has been an advantage of the currency devaluation of the Indian Rupee against the currencies that we are operating in all of these geographies. So it’s a combination of three factors, if I were to moderate the one time pass through, out of the 42 crore revenue jump during this quarter, about 10 crore is the one time. The rest 32 is because of organic revenue growth, new customer growth and forex gain. Your second question you briefly asked was about Middle east and what do we see there as the Middle east issues unfolded in front of all of us at Quest Corp.
Also first, we were absolutely cognizant of the fact that both our core employees as well as our associate employees have to remain safe. Our treasury operations, balance sheet and finance has to be robust to take care of all eventualities and to be able to pay everyone as per the laws on time. I must tell you that we’ve had a record revenue closing even in Q4 in Middle east, in spite of all of these factors, we’ve had a record collection at almost 170%. Our OCS has been healthy this year and we’ve crossed at an operating level.
We’ve crossed our AOP targets at revenue, EBITDA and margin, all three during the quarter. In Middle east, we remain concerned and we continue to keep watching that situation extremely carefully. We are also in touch with all of our customers. One of the things that when we deep dive our Middle east results has been something that we’ve been structurally doing for the last seven to eight years. We are not embedded to any one segment, any one customer or any one market there. We are actually in mostly essential services, which is technology, insurance, telecommunications, e commerce and logistics, banking and then retail.
So the portfolio diversification in the last seven, eight years and the strength of the quality of customers that we work with, backed up by the essential services nature of the work we have done, we continue to close Middle east for this financial year and this quarter at a high point of more than 2,000 contractors. We will continue to watch the situation as it unfolds very, very closely. I will briefly move to the general staffing. I believe you were asking the question on Overall margin at 2.2%, am I right, Siddharth?
Amit Chandra
No. For general staffing,
Kushal Maheshwari
Our margins are at 1.5%.
Louis Bhatia
So general staffing, Siddharth, very specifically, if you look at a very holistic picture of Quest as it has been unfolding in the last three or four years, this has been backed up by the three distinct platforms. The second you would notice that in each platform we have a volume and a value strategy. The third, you would notice that while we are chasing growth at a volume level, specifically in the general staffing business as well, in each of the segments and platforms including general staffing, we are also going after the higher margin businesses.
GS also has modeled their next four year trajectory on value and volume. We have customers in construction, we have customers in value added services and manufacturing which has been yielding slightly higher margin than the margins that we’ve seen traditionally in this business.
Siddharth Zabak
Got it. Thank you so much and all the best for the coming quarters.
Louis Bhatia
Thank you.
Operator
Thank you. We will take the next question from the line of Vikas Ahuja from Antique Stock Broken. Please go ahead.
Unidentified Participant
Hi. Thank you for the opportunity and congrats on good execution. So I have a couple of questions on margin and then one related to that discontinued project which resulted in 7,000 headcount loss. So firstly, you know, on professional staffing margins are now 12.7% and we have seen this improvement. It’s a consistent improvement we have seen over the last five, six quarters. Do we think there is more room to improve these margins further and overseas at 6.2 as well while Journal staffing remain at 1.5.
As the higher margin segments scale, what is the expected blended margins we expect over next two to three years? That is my first question. Thank you.
Kushal Maheshwari
Thank you Vikas. For the professional starting. I’ll ask Noit to give you a color on this.
Louis Bhatia
Yeah Vikas, thanks for that question. To your question on professional staffing and how did we scale to 12.7% and is this something which will remain for the long term or are we further anticipating uptick in margin? This has been a structural story which quest has been working in our professional staffing side since 2020 2021. We’ve done multiple things. One, we have moved away from the low margin 0 to 3 years of experience category. Second, we have pivoted ourselves to GCCs and today our book is almost 71% built on the back of GCCs followed by another 20% on IT customers within enterprises followed by 9 to 10% only from the IT services pack.
The third is we’ve gone higher on the execution capability both with the niche segment as well as with the experience skill set. All of this has yielded to higher margin which is a plan that our professional staffing team has made. We will continue to remain with that focus and that trajectory in times to come. As far as the guidance is concerned, it would be safe to say that we would continue to remain and measure ourselves in the 11 to 12% margin category for the medium term as well. As far as overseas is concerned.
The book is today built on multiple countries, Middle east and Philippines. Both are double digit margins at 11 and 10% today. Singapore, which had some challenges in the last six quarters which we’ve spoken about in every call in the past, has now come out of that trough and has built a general staffing business as well. Yields are close to a 5.5% margin profile and Malaysia yields about a 4.3% margin profile. So the blended margin is at about 6.2. We would continue to keep working ourselves towards a 6% plus margin as far as our international mix and book is concerned.
You briefly mentioned that you wanted to know about the 7K discontinued project.
Unidentified Participant
Yes, I think that question is actually so before that I wanted to get some understanding on overall blended margins for next two to three years and the question on that 7,000 was can you provide more details on the revenue and margin impact of this discontinuation? And and also are we largely done with this restructuring or do we think that in FY27 there could be some revenue hit because of further discontinuation of project?
Kushal Maheshwari
So for the question on the overall margin, basically is it sustainable and for the next two to three years I will ask Lohit to answer this thing followed by the question on disadvantages.
Louis Bhatia
So as you see Vikas, this year started with a range of 1.6% to 1.8% margin. Across our various quarterly calls we had said that we want to be at 2% and create that as a new baseline and foundation for our company today. We are glad that at a full financial year FY26 basis we have crossed the 2% mark. But as we exited Q4 it was 2.2%. If the blending of our current portfolio remains where it is, a 2.2% is possible. However, given the fact that general staffing is a 1.5% EBITDA margin business, we are anticipating a higher clip rate growth in FY27 and thereafter in terms of headcount.
So it would be safe to say that in an immediate term a 2% plus margin. In a medium term going towards a 2.4%. As far as medium term is concerned, I would call it a three year period that would be a medium term. So that’s how we should kind of look at it. To your question on the discontinued project, as you would remember, closer to our demerger timeline we had said any business which does not meet the financial metrics of the company and does not yield us the cash realization, we will exit and discontinue such businesses.
This was one of the projects which we were doing which was 7,000 odd resources but a milestone based project which in this financial year we’ve completely closed and dialed down. The impact of revenue from this is roughly about 1.3% at about 200 crores. We do not have any such known event in front of us.
Unidentified Participant
Okay, thank you. And my final question is then I’ll go back to the queue that GCC within professional staffing now contributes 71% of the headcount. How does the GCC margin profile compare to the broader professional staffing? And is there further GCC LED margin upside before she also do we see any risk to this GCC story we have seen in last couple of years as many of the large, you know, U.S. Companies are talking about reducing headcounts this year. So that could be trickling down to their DCCs as well and could have some indirect impact on us.
Thanks a lot.
Louis Bhatia
So Vikas, let’s understand this difference and I think it’s an important point that you raised. Why are GCC slightly different from IT services? I think it’s a very different business that both these are in. IT services are primarily in the digital transaction as well as transformation space. But a lot of volume is gathered at the entry level which is 0 to 3 years and 3 to 5 years. When you look at GCCs, they are coming to India to solve a certain technology problem for themselves. And they are not just looking at India as a cheap base to solve talent, but they are also looking at India for transformation and beyond transformation as well.
In gccs you need ready talent which comes with skills, which comes with experience and which comes with minimum seven to eight years of exposure and more. Hence it’s a very different segment of talent that we deal with. And likewise for a higher experience, automatically the revenues and thus the complexity of that enhances. Because we’ve created a high value verticalization team within our professional staffing practice as well. We are able to yield the kind of results that we do.
Neeraj Jain
I think there was a question around softness of GCC in the US with professional staffing. So maybe what we are also seeing from our side is one the time and the opportunity for overall GCC that we can tap in India. But more importantly we are seeing a wider DCC demand coming in from the Asia Pacific. So as a company we are looking at new corridors where we can tap the GCC demand for this vertical. Okay, thank you,
Unidentified Participant
Thank
Neeraj Jain
You,
Operator
Thank you. We will take the next question from Blind of Dipesh Mehta from NK Global. Please go ahead.
Dipesh Mehta
Yeah, thanks for the opportunity and congrats on strong execution. My question is largely linked with revenue growth side and headcount side.
Operator
First
Dipesh Mehta
On general staffing if I look revenue growth for 26 is largely muted and even if one adjusts for the accounting for labor code which we did on revenue extensive side and adjusted for 7,000 project related impact which you indicated it is largely flat is so can you provide some sense how you expect the general staffing growth to layout considering your margin focus and cash conversion? Whether you find enough double digit growth kind of opportunities starting FY27 or growth likely to be tepid particularly on revenue side in general staffing that is Question one.
Second question on professional staffing, if I look at it over last few quarter growth started tapering off on revenue side how you expect this revenue growth to play out even though our focus came in on GCC and all those things but largely seems to be now growth is tapering out. So trying to get your sense on revenue growth side and third question is on the labor core kind of thing, what percentage of our revenue or client would have accepted let’s say revised terms or revised rate based on the new labor code related revision and where discussion are still let’s say if you can provide some sense only.
Thank you
Louis Bhatia
Dipesh. I’ll answer the questions and then hand over to my colleagues Nitin and Kapil to throw some more light on the specifics that you’ve asked. The first thing you’ve asked is revenue and headcount growth related to general staff. Let me clarify a few points. 1. With the year which kept us so busy in India Starting from the second quarter of GST 2.0, third quarter labour code and fourth quarter global factors including state elections. In spite of that fact, our general staffing team this year has added 26,000 net addition to employment while our historical average has always been 45 to 50,000 and we continue to run investments, teams and technology to be able to deliver those kind of numbers, we see that this 26,000 has further been muted by the 7,000 which as a leadership team we took a conscious call to decline from those businesses and hence the like for like number for an entire organization you’re noticing is only at 19,000.
At 26,000 I would say we have performed at 50% of our installed capacity. But this 50% of installed capacities in spite of the structural things which were happening both on the demand and the supply side as far as India is concerned in the last couple of years. I will ask Nitin to throw some more light on the kind of capacity that we have from a sales execution, sourcing reach perspective.
Nitin Dave
Thank you. Dipesh, this is Nitin Dawe. We in general staffing are well invested in terms of verticalization new lines of business recruiters. We have a very resilient sales team that is in a position to deliver 275 to 300 new logos every year. In fact in the last 12 quarters they have added more than 100,000 new headcount. The same is true for our recruitment team. We have a very stable recruitment team which can consistently deliver headcount. So in a stable environment this team can consistently deliver headcount growth going forward.
And new lines of business where also we are working, they can also start kicking as we go forward.
Louis Bhatia
We will hand over to Kapil for the PS question professional staffing that you asked.
Kapil Joshi
So Professor Shavik, I understand your concern but it is very cyclic. If you see H1 versus H2, you know what happened in H2 we have impact and the number of working days since we work on DNM model in professional stage in number of working days also impact our revenue. And Q3 and Q4 specifically Q4 has the lowest working days in a whole year. So probably the real efforts, what we put in the sales or what we do headcount addition hold the year does not reflect in Q3 Q4 performance because of the furlough and less working days.
But just to let you know, we have acquired 6461 logo in whole year out of this, you know 50% plus has already gone active and we have 200 plus you know resources already deployed in this, you know in account which are required in this year only. So the real impact probably will be visible in echo.
Dipesh Mehta
Sorry to interrupt but let’s say both the general staffing and professional staffing, let’s say in professional staffing I am referring to YUI growth. So seasonality which you are referring to as I think should not have any impact. When we look yoy growth. Your YOY growth in specialized or professional staffing is double digit. Your exit is half of it quarter for YY growth. So I was referring to that on general staffing you indicated let’s say around 10 to 15k per quarter kind of net addition which is what the capacity which we have and we achieve roughly half of it.
When you look let’s say somewhere around 25k for the year in terms of net addition excluding the 7,000 loss. So my question is it is not getting captured in the when I look let’s say revenue number, right? You are saying that addition happened but let’s say at the end of day when I look full year headcount addition or changes at least in 26 not played out. Are we confident 27 the kind of capacity 10 to 15k addition per quarter should actually start getting reflected into your net revenue growth.
Kushal Maheshwari
I will ask Rohit to answer your question on the general staffing and eventual reflection in the revenue growth for the company.
Louis Bhatia
So Dipesh, two quick points. One on the general staffing business you might remember there was a base decline effect about a year ago in Q4 of last financial year there was a BSSI regulatory based impact which caused a 37,000 decline. While this happened more than a year ago, the shrinkage of revenue from that was to the tune of 7%. Today like for like when you see the growth created by this year is actually 10% for the year. In spite of the three broad structural changes which happened in our economy in quick succession one after the other which is GST 2.0 which is labour code as well as global factors and elections all happened in a matter of seven months in the last seven months of the economy.
Yet if you negate for that one time event last year you will actually notice that the business has grown 10% year on year negated for that the number on the balance sheet obviously comes to 2%. Do a quick follow on what Appil has already explained from a GP perspective. I also like to bring to your notice that two quarters ago we had said that we had one of the projects in our MSP which was run rating at close to about 10 crores revenue line and that project was for one year. That project ended in that quarter and hence that is the one which has had a drop if you see it from the slide itself from 244 crores revenue to 224.
From 224 we have been increasing and enhancing and come back to 232 crores per quarter and rest as Kapil explained 61 new contracts and logos predominantly 90% of those are GCC customers itself have given us new mandates and we feel that this year we will be able to come back on a 10 to 11% headcount growth and 12 to 13% revenue growth.
Dipesh Mehta
I think that answer double digit growth you are indicating to return. And last part which is answered is about the labor for how many client or percentage of revenue agreed to and where you intend some effort to be made in subsequent period.
Neeraj Jain
Yeah, this is Neeraj. So we are closely monitoring the labor code situation. I think given our expectation like Law is also evolving so those are yet to be notified. To specifically answer your question. I think we expect more and more responses to pick up in Q1 and Q2 from confirmation from the client side in terms of which approach they want to take. So hopefully by Q1 and most likely by end of Q2 we should be able to have full confirmation from client and accordingly we’ll take that impact.
Siddharth Zabak
Understand, thank you.
Operator
Thank you. We will take the next question from the line of Amit Chandra from HDFC Securities. Please go ahead.
Amit Chandra
Yeah, thanks for the opportunity. The first question is on the professional staffing side. Obviously you answered upon the margin expansion piece. But it’s very heartening to see the margin expansion coming back in the sector at an overall level after a very long time. But if I just compare the professional staffing margins to the competition, we are just almost, almost like double of that irrespective of the GCC contribution being in the 70% range for the competition also. So what exactly we are doing differently here and what gives us the confidence that these kind of margins in the professional staffing is sustainable over medium to long term.
Kushal Maheshwari
Thank you Amit for your question. I’ll ask Noid to answer your question followed by.
Louis Bhatia
Thanks Amit for the question. Amit, I would like to speak for Quest. I would not be able to speak on behalf of any other organization in the industry. Having said that, I think structurally what you are seeing as a result today in FY26 is very tireless efforts and execution which has been put way back in 2020, 2021 post Covid we were of a clear realization that the market will undervamp on margin side across the entire industry. And our professional staffing team led by Kapil Joshi and his entire leadership team worked very hard on the facts of what would create future growth in India.
The clear message there was coming out to be was GCC followed by IT within enterprise customers and then followed by IT services. That is the way Quest was looking at demand for itself. I’m not talking about the Indian IT industry. I’m saying this is how Quest was viewing what opportunities Quest will want to partake in. The second point was we also realized that as customers, the GCC customers will arrive in India. They will want solutions with experienced skill set whether it’s in data center, whether it’s in artificial intelligence, whether it is in cyber security, whether it’s in product based.
And those skill sets will be niche skill sets which will require different delivery, different recruitments, a lot of technology embedded value in how we Source and how we screen candidates, how do we onboard, how do we retain the talent with us? And that was the work which is being done for the last five years. Way back in 2020, 2021, the EBITDA from the professional staffing business was at 4, 4.7% if I remember correctly. And it has taken approximately five years to get to a 12% mark during this period.
It is not just a margin expansion, it is a revamp and a rebalance of the nature of customer and type of contracts we have signed. It is the kind of revenue pattern per person that we are doing. It is the niche skill set that we are working on. And we have strategically exited a few projects along the way. So it’s a structural story led by five years of intense execution.
Amit Chandra
Okay, just to follow up on the staffing thing, obviously FY26 has been a very strong year, but the exit was a bit weak in terms of the Y as has been highlighted earlier. So in terms of the overall growth for the next year and the profit, especially in view of that, the last two years or three years rather has been very strong for the you know, number of GCCs opening up in India. And most of this demand has been created by opening up, opening up of like new gcc. But once that slows down and because of the EI impact we are not seeing any you know, hiring at the, at the net level from the existing ones or the existing like you see from the IT services.
Do we foresee any kind of slowdown in terms of the headcount addition here and any change in strategy for the broadcast.
Kapil Joshi
So first let me answer you on you know, quarter four. Like I said, quarter four has the lowest ever working days. Okay. And we have some spillover you know, in the first week of January on furlough also so that revenue does not truly reflect our net addition and you know the margin improvement for the quarter four and hopefully it should reflect in H1. Okay now second question on AI impact on GCC and the kind of work we do. So what is, what is happening? And Lohit has already briefed about it. We have actually in last two years we have moved from volume to value business.
You know earlier your most of the contracting used to happen for your low end L1A2 support maintenance job. You know, wise, non wise kind of support testing kind of role. What has happened in you know, because of the GCC penetration and because of the AI impact the skill requirement has completely changed. Two years back there was only 30% demand in AI data cloud cyber security space. Now this contribute almost 60 of total demand where we have better build rate and better margin. Second thing, what happened in GCC space which LOHI has already gripped that GCC do totally very different business than IT services.
Okay, so the contract staffing earlier used to be in zero to four year experience bracket. Now it happened four year plus up to 10 years. So these two things has actually, you know have changed the entire landscape and probably a result of AI impact also. More importantly there is a huge demand supply gap on all this emerging technology. And that is where staffing company play a big role. None of this large organization has a branch resource are ready to deploy talent available. And our delivery strategy strong delivery engine actually fueled this growth and it somewhere it help us in new sense also.
Amit Chandra
Okay, okay. And my last question on the general stocking. Obviously we have some impact on the restructuring but in the base that we have right now, have we any further risk of any regulatory led or any further restructuring which can impact the additions? Because we have strong growth additions but it’s not showing up in the net because of the high leakage or the high attrition, whatever you want to put it. And also the margin expansion that we are seeing is also a result of only exiting the lower margin businesses or is it that we are moving up in terms of the value add and also collect and pay?
Because the collect and pay we are not seeing any improvement. So in terms of business model, is there any changes or just exiting lower margin business?
Louis Bhatia
Yeah, thank you for that question. So if you see it from a general staffing business and nitin, the way our leader was explaining prior to this that the way the business is modeled we grow from new customers where we added 281 clients during this year. We continue to hold ourselves responsible for adding 275 to 300 unique clients every year. We have an installed capacity of sourcing of up to 50,000 people per quarter. From our sourcing led initiatives the last two quarters we’ve been able to deliver only 37 and 38,000 out of that installed capacity of 50,000.
So we have an upside play there as well in our capacities. The third is India’s structural changes which were happening in the last seven months more or less. We feel this is done unless something new comes up. And obviously west is a very integral part of Indian economy in many ways a backbone to 2,300 plus corporate clients. If something comes up, obviously it will impact the entire economy and so it might impact us as well. But at this moment we are Poised for growth based on the capacities we have, the execution, the reach and the technology that we have.
Amit Chandra
Okay, thank you. Okay. Okay.
Neeraj Jain
I think this is Neeraj. I think there was a question around collect and pay. Just wanted to update that demo staffing from a vertical standpoint to diversify and expand their business in construction and manufacturing of new verticals. So as of today our collect and pay 76% is a very healthy number and we basically have a target to maintain this number. As I said, given the fact that we are now expanding into high margin construction and manufacturing verticals where it is going to be at least 30 days to 60 days DSO trend overall at a GS level, if we are able to peg ourselves between 70 to 76% I think we are in good shape.
Amit Chandra
Okay, thank you.
Neeraj Jain
Thank you.
Operator
Thank you. Before we take the next question, a reminder to all the participants. You may press star and then one to ask a question. We will take the next question from the line of Shankar Narayanan from ITOT pms. Please go ahead.
Sankaranarayanan S
Good morning sir. Am I audible?
Operator
Yes sir. Hello.
Sankaranarayanan S
Yes, thanks for talking. I wanted to understand the major drivers of the EC segment. So in terms of headcount this year we have seen close to 7 percentage of headcount addition in headcount growth in professional staffing segment. And do you think this number can inch up slowly to let’s say 10 to 12 percentage going forward? And if so will it be coming from the mature GCCs who are adding the headcount or the new GCC which are setting up in India for the first time and through the bot model that we are engaging.
So I wanted to understand the difference between two and how will it impact the headcount of in the business.
Kushal Maheshwari
Thanks Shankar. I’ll ask Kapil to answer your question on GCC
Kapil Joshi
Straightforward. You know we have added our. We have added roughly 400 plus net addition was there on our level associates for the last year. 50% of that actually came from the new sign up. The 61 lower what we have signed for the year. So the new sales is definitely driving the net addition. Okay. I am confident that the net addition for next couple of years will be in the double digit 10 to 12% what you are expecting. And 50% of this should come from the new sign up and 50% from existing logo where we are serving right now.
Sankaranarayanan S
All right sir. And in the engagement model are we engaging directly with the client or are we partnering with any of the real estate developers who manage the property as well?
Louis Bhatia
We look at every opportunity available in the market. There are consulting firms which bring businesses to India but then they need a strong execution partner and Quest sits there. There are developers who have large mandates for the space that is taken. But again on talent, which is 80% of the problem that the GCC wants to solve. Again Quest becomes a partner there. So there are multiple ways, direct as well as indirect with our teams. Through our teams as well as through partnerships in the market.
We’ll continue to keep watching. Wherever an opportunity exists, we will find Quest being there.
Sankaranarayanan S
And finally the model into our estimate was tax rates should be improved for the next three years.
Kushal Maheshwari
Sorry, can you be repeat your question
Sankaranarayanan S
Asking on the effective tax rate tomorrow for the next three years?
Kushal Maheshwari
I will ask needles to answer
Neeraj Jain
This question. So yes, I mean given our business and business mix and the new sector that we are looking at, I would say from an ETR perspective we should be looking at a 7 to 10% range.
Sankaranarayanan S
7 to 10% range.
Neeraj Jain
Yeah.
Sankaranarayanan S
Got it sir. Because. And regarding our contingent liability as well. So if I go through the last year annual reports majorly it was saying that the salaries that we are processing is higher than the 25,000 mark which is given in the at double ja act. So for the next two, three years, do you think this will increase the absolute tax amount that you are paying because the wage inflation will also increase the salary of the associate.
Neeraj Jain
Okay, so from an ETL standpoint and contingent liability standpoint it is contingent liability is a component of two elements. One is the ATJJ litigation that I think it’s an industry litigation, it’s an industry wide impact as we say, while the matter is subjugious and we expect some concrete progress to happen on this, you know, this subject in this year we continue to avail the ATJJ exemption. So I don’t see any impact coming coming in from there. The other element of contingent liabilities, GST litigation that we have where in early stage litigation.
I think it’s going to be a little slow as we progress on this matter because there are a lot of insurance companies that need to be, you know, you know, the, the other party. There are almost 10 insurance companies that are part of the litigation. So there will be element of progression that we will see in this year. But I don’t expect a concrete conclusion on this matter. So from a contingent liability, unfortunately till the time we get final conclusion at, you know, the next level, we have to maintain the current stand.
But from our standpoint we don’t expect any impact.
Sankaranarayanan S
Got it sir. Thank you.
Operator
Thank you very much. Ladies and gentlemen we will take that as a last question for today and with that concludes the question and answer session. I now hand the conference back to the management for closing comments. Over to you sir.
Louis Bhatia
Thank you everyone for joining us and continuing to support QuestCo in this journey. As we said we are foundationally strong in our 19th year and one year post our demerger. From a balance sheet perspective there is strength in the organization and in the balance sheet both from a business and an execution point of view as well as from a Treasury and a finance point of view. We will continue to keep looking forward for your questions and feedback. As always we will appreciate your continued interest and support and sincerely look forward to catching up with all of you again.
Thank you very much.
Operator
Thank you members of the management on behalf of ISL Capital Services limited that concludes this conference. Thank you all for joining with us today and you may now disconnect your lines. Thank you. It.