Quess Corp Ltd Downgraded to Sell Amid Weak Technicals and Long-Term Growth Concerns

Quality Assessment: Mixed Financial Performance

Quess Corp’s financial quality presents a nuanced picture. The company reported a robust performance in the second quarter of FY25-26, with a quarterly PBDIT reaching a peak of ₹76.70 crores and a 9-month PAT of ₹166.82 crores, marking a healthy growth rate of 20.45%. Additionally, the company’s return on capital employed (ROCE) for the half-year stood at an impressive 21.09%, while return on equity (ROE) was a strong 19.2%. These metrics indicate operational efficiency and effective capital utilisation in the near term.

However, the long-term financial trend remains a concern. Operating profit has declined at an annualised rate of -8.88% over the past five years, signalling structural challenges in sustaining growth. The stock’s total returns over the last year have been negative at -38.9%, significantly underperforming the Sensex, which gained 8.65% over the same period. Over five years, Quess Corp’s stock has lost 30.23%, while the Sensex surged 68.52%, highlighting persistent underperformance relative to the broader market.

Valuation: Attractive Yet Risky

Despite the weak price performance, Quess Corp’s valuation metrics remain appealing. The stock trades at a price-to-book (P/B) ratio of 2.7, which is below the historical average of its peers, suggesting a discount valuation. The company’s PEG ratio stands at a low 0.2, indicating that the stock price is not fully reflecting its earnings growth potential. Furthermore, the dividend yield is notably high at 4.9%, offering income-oriented investors a compelling reason to consider the stock.

Nevertheless, these valuation positives are tempered by the company’s poor long-term growth trajectory and recent profit decline of -3.5% over the past year. Investors should weigh the attractive valuation against the risks posed by deteriorating fundamentals and market sentiment.

Financial Trend: Positive Quarterly Results Amidst Long-Term Weakness

Quess Corp’s recent quarterly results have shown signs of operational improvement, with the highest recorded PBDIT and a strong PAT growth rate. The company’s low average debt-to-equity ratio of 0.09 times further strengthens its financial stability, reducing leverage risks. Institutional investors hold a significant 23.89% stake, which has increased by 0.57% over the previous quarter, signalling confidence from sophisticated market participants.

However, the broader financial trend remains negative. The company’s earnings have declined by 3.5% over the past year, and its stock has underperformed the BSE500 index over the last three years, one year, and three months. This persistent underperformance raises concerns about the sustainability of recent gains and the company’s ability to reverse its long-term downtrend.

Technical Analysis: Shift to Bearish Sentiment

The downgrade to Sell was primarily driven by a deterioration in technical indicators. The technical grade shifted from mildly bearish to outright bearish, reflecting weakening momentum and negative price action. Key technical signals include:

• MACD on a weekly basis remains mildly bullish, but the monthly MACD is bearish, indicating longer-term downward pressure.


• Relative Strength Index (RSI) shows no clear signal on both weekly and monthly charts, suggesting indecision but no bullish momentum.


• Bollinger Bands are bearish on both weekly and monthly timeframes, signalling increased volatility and downward price pressure.


• Daily moving averages are bearish, confirming short-term weakness.


• KST indicator is mildly bullish weekly but bearish monthly, reinforcing mixed but predominantly negative momentum.


• Dow Theory assessments are mildly bearish on both weekly and monthly charts, indicating a lack of confirmed upward trends.


• On-balance volume (OBV) shows no trend weekly but a mildly bullish trend monthly, suggesting volume is not strongly supporting price moves.

These technical factors collectively point to a weakening price structure, with the stock currently trading at ₹204.85, close to its 52-week low of ₹198.00 and significantly below its 52-week high of ₹378.10. The stock’s recent day change was negative at -0.61%, reflecting ongoing selling pressure.

Comparative Performance and Market Context

When benchmarked against the Sensex, Quess Corp’s performance has been disappointing. Over the past year, the stock has declined by 38.9%, while the Sensex gained 8.65%. Over three years, the stock returned 5.71% compared to the Sensex’s 36.79%, and over five years, it lost 30.23% against the Sensex’s 68.52% gain. This persistent underperformance highlights the challenges the company faces in regaining investor confidence and market share.

Within the diversified commercial services sector, Quess Corp’s valuation remains attractive, but the weak technicals and financial trends have led to a cautious stance. The MarketsMOJO Mojo Score currently stands at 46.0, with a Mojo Grade of Sell, downgraded from Hold on 19 Jan 2026. The company holds a Market Cap Grade of 3, reflecting its mid-tier market capitalisation status.

Conclusion: Downgrade Reflects Caution Amid Mixed Signals

The downgrade of Quess Corp Ltd to a Sell rating is a reflection of multiple converging factors. While the company has demonstrated pockets of financial strength in recent quarters, its long-term growth prospects remain weak, and its stock price has underperformed significantly relative to the broader market. The bearish shift in technical indicators further compounds concerns, signalling potential for continued downside pressure.

Investors should approach Quess Corp with caution, balancing the attractive valuation and dividend yield against the risks posed by deteriorating fundamentals and negative technical momentum. Monitoring upcoming quarterly results and technical developments will be crucial to reassessing the stock’s outlook in the near term.

Unlock special upgrade rates for a limited period. Start Saving Now →