- 10 Nov 2022
- ICICIdirect Research
Consolidated margin expansion positive for TeamleaseTEAMLEASE - 2211 Change: 6.10 (0.28 %)
Revenues increased by 4.0% QoQ to Rs 1,955.1 crore mainly led by 4.7% QoQ growth in general staffing (91% of revenue mix) while specialised staffing and other HR services revenues dip 2.5%/0.4% QoQ. Consolidated margins improved 32bps QoQ to 1.6% aided by margin expansion in all 3 businesses (10bps QoQ/40bps QoQ/260bps QoQ margin expansion in generalised staffing/specialised staffing/other HR services respectively). Margins also supported by lower other expenses for the quarter (down 12% QoQ). Productivity (headcount to core employees) has improved to 352 (+0.6% QoQ) while pricing remained flat QoQ. PAT also aided by higher other income.
Team lease margin performance came in better than expected. The company guided for similar margins in FY23 as that of FY22 i.e 2.2%, considering current run rate in H1, we believe that achieving that number would be an uphill task (Rs170 crore EBITDA in H2 vs Rs57 crore in H1) and they are likely to miss that number. Also, the headcount additions has been moderating indicating slower growth in H2