When most engineering-services bosses talk about artificial intelligence, they sound like executives preparing for disruption. Ajit Prabhu sounds like someone who has already factored it into the plan.
The founder and chairman of engineering services provider Quest Global has built one of the world’s largest pure-play engineering, research and development (ER&D) firms. The company generated $1.1 billion in revenue in FY25, maintained Ebitda margins of nearly 20% and employed over 23,000 engineers across 20 countries.
It has compounded revenue at about 22% a year for two decades, with only two negative years. The question now is whether AI disrupts that model—or strengthens it.
Investors appear to be backing the latter. When Carlyle re-entered in August 2023—buying out Bain Capital and Advent—it valued Quest at close to $2 billion, investing around $500 million for roughly 28%.
Today, it is valued at about $4.5 billion after a round involving Hillhouse—a 2.5x step-up in under three years. And had Carlyle held its original 2003 stake, bought near a $20 million valuation, Prabhu reckons the return would run to some 160 times, outpacing the BSE, the Nasdaq and the S&P.
AI as accelerant, not solvent
Prabhu’s core argument is that ER&D and IT services are “day and night different.” IT services rest on repeatable workflows, the work AI eats first; engineering rests on domain intensity and problem definition, which AI amplifies.
“These are all hypes that come and go,” he says. “But what stays through hundreds of years is the entrepreneurship—the problem-solving, the innovations.”
The mechanism he sees is a cash flywheel. “Higher productivity means they don't need to spend as much money managing today’s business,” he says. “All that profit they'll make by cutting the cost—they have to invest it back in ER&D, because that's where the future of their business is.”
More AI means more chips, more data centres and more power gear—a chain he believes guarantees “the next 20 years” of demand, not the next five.
“Instead of solving one problem, we’ll end up solving 10, because we are a lot more productive,” he says. “This is the best time, in my opinion, for engineers, because all the routine stuff we can get done much faster.”
The market isn’t convinced
ER&D providers had a tough 2026: the listed cohort fell about 11% early in the year as investors weighed how agentic AI, muted hiring and outcome-based pricing squeeze a business tied to billable hours.
The sizing is more sober than Quest’s, too. Prabhu frames a market barely 5–10% penetrated, heading toward nearly $4 trillion in global ER&D spend; the Nasscom–Everest Group report The Global ER&D Shift: Evolution of Engineering Services and India’s Competitive Edge is more restrained, putting global enterprise ER&D spending at $1.53 trillion in 2024, reaching around $2.5 trillion by 2030, with the outsourced slice growing only from around $82 billion to around $135 billion.
Crucially, it argues India’s providers—now a $19–20 billion industry—must move beyond cost arbitrage toward IP-led innovation, AI-enabled engineering and outcome-based partnerships. That is the ground Prabhu claims Quest already holds, via co-innovation and jointly owned IP—but the report shows the whole industry now chasing it.
The field is converging. India’s pure-plays—Tata Elxsi, LTTS, Cyient, KPIT, Tata Technologies—European majors like Capgemini Engineering and Alten, and the big IT houses bundling ER&D into megadeals all chase the same budgets. The bigger threat: original equipment manufacturers (OEMs) are increasingly bringing software in-house, even as generative AI (GenAI) boutiques nibble at margins.
Built to last, by design
Prabhu’s answer is a refusal to broaden. “Our depth is our core. Our focus is our core,” he says. “The more problems we solve, the stickier we become, the more valuable we become to the client.” It is deliberate: “I've never built a company pursuing a trend and jumping on it.”
The structure backs it—no client above 10% of revenue, no vertical above 25%, and a first client that, 29 years on, is still the largest. His ambition is a “centenary company,” modelled on the Japanese Sanpo Yoshi principle.
“We are a global company by mind, an Indian company by heart,” he says of the diversity behind its 20 acquisitions. His senior leaders can each run $100 million-plus P&Ls—so that the company outlasts him.
He is not eyeing an exit, nor short of suitors. “We have been approached by every one of them—during good times, even more during bad times,” he says. “But now they have stopped calling. Finally, the message has sunk in.”
Twenty-eight years in, Prabhu remains the largest shareholder, has funded 786 scholarships toward a personal target of 1,000, and insists the best years are ahead. Whether the AI wave proves him right is the open question. But he is not building for a cycle.