TeamLease Services Ltd. share price target

General Staffing Associates grew by 1,402 QoQ (+1% QoQ; 16% YoY) to 154,095 (below our est. of 4,000 additions QoQ). The miss was a function of pronounced 4Q seasonality. Specialized staffing saw a decline of 170 associates QoQ to 5,947 (below our est. of 6,424). EBITDA margin at 2.2% increased 10bp sequentially (above our est. of 2.1%). EBITDA margin had a broad-based improvement with General Staffing 20bp above our est. of 2.1%. Specialized staffing EBITDA margin was 6.2% (30bp beat to est. of 5.9%). This was despite softness in Telecom staffing, which...

TeamLease Services (TEAM) has announced the acquisition of eCentric Solutions' IT staffing business, which has 880 associates and revenue of INR450m (as of FY18). The company will pay 4.5x PBT (~INR150-180m) or the acquisition through its subsidiary TL Digital by way of slump sale on a going-concern basis.

ICICI Securities Ltd | Retail Equity Research TeamLease Services' (TLS) Q3FY19 results was a mixed bag with revenues above our estimates and margins below our estimates. Growth was led by general staffing and specialised staffing services Revenues grew 7.5% QoQ and 27.7% YoY to | 1172.2 crore, above our | 1145 crore estimate. Revenues from general staffing grew 8.6% sequentially to | 1062 crore, specialised staffing grew 4.7% QoQ to | 79 crore while HR services declined 16.8% QoQ to | 31 crore...

Maintain BUY with a TP of Rs 3,300 based on 40x Dec-20E EPS. Teamlease reported strong revenue growth for 3QFY19 but missed on margins. Revenue stood at Rs 11.72bn up 7.5% QoQ vs our est. of Rs 11.40bn. Growth was led by Core staffing (90% of rev, +8.6% QoQ) offset by HR Services (3% of rev, -16.8% QoQ). Specialised staffing (7% of rev) grew 4.6% QoQ led by IT staffing offset by soft Evolve (Telecom staffing).

TEAMs 3QFY19 Revenue at INR11.7b grew by 28% YoY (exp. of +22% YoY); EBITDA at INR245m grew by 37% YoY (exp. of +44% YoY); PAT at INR255m grew by 39% YoY (exp. of +46% YoY) General staffing associates grew by 7,548 QoQ, +5.2% QoQ and 16.6% YoY to 29 January 2019 152,693, above our estimate of 5,000 additions QoQ. Specialized staffing saw in uptick of 52 associates QoQ to 6,117 (+3.5% YoY), and in line with our estimate of 6,100. at 2.1% declined 10bp sequentially, below our estimate of 2.3%. However, EBITDA margin in General staffing came in line with our estimate of 2.1%, whereas the disappointment was led by specialized staffing, where EBITDA margin was 5.6% (-170bp QoQ) v/s estimate of 7.

TeamLease Services Ltd. (TEAM) is the largest player in the organized staffing industry with a market share of ~6%. It has presence in all 29 states with a network of partnerships delivering in over 6,000 locations with 2,250 clients and 1,700 core employees.

TeamLease Services Ltd. (TEAM) reported strong set of numbers which were marginally ahead of our estimates. Its Net sales and PAT grew by 24.6% and 43.1% yoy led by strong growth in headcounts and consistent improvement in productivity.

Maintain BUY with a TP of Rs 3,260 based on 40x Sep-20E EPS. Teamlease reported strong set of numbers for 2QFY19 with beat on both revenue and margins front. Revenue stood at Rs 10.90bn up 6.8% QoQ vs our est. of Rs 10.64bn. Growth was led by Staffing (90% of rev, +6.7% QoQ) and HR Services (4% of rev, +25% QoQ). Specialiced staffing (6% of rev) was soft due to higher attrition in IT staffing & Evolve.

TeamLease Services' (TLS) Q2FY19 results were above our estimates on all fronts. Growth was led by general staffing and HR services Revenues grew 6.8% QoQ and 24.6% YoY to | 1090.7 crore, above our | 1030 crore estimate. Revenues from general staffing grew 6.7% sequentially to | 977 crore, specialised staffing grew 0.8% QoQ to | 76 crore and HR services grew 24.6% to | 38 crore In terms of associate count, addition of 7410 associates QoQ in general staffing was healthy while net additions in NETAP trainees in...

TeamLease Services Ltd. (TEAM) reported decent set of numbers wherein Net sales grew by 19.7% in line with our estimates. However, EBITDA margins came in marginally lower than our estimates at 2%, up 50bps yoy. Net profit growth stood at 33.1% yoy. We expect TEAM's performance to continue due to increased preference for organized players and its strong growth momentum in high margin business. Recommend Buy.