- 25 Jan 2023
- ICICIdirect Research
Margins flattish on mercy of lower unallocated expenses - Teamlease Services Latest Quarterly Result
TEAMLEASE - 3339 Change: 40.65 (1.23 %)Teamlease Services – Q3FY23 First Cut
(CMP: Rs 2,412; MCap: Rs 4,124 crore)
Q3FY23 Earnings Summary
Revenues increased by 2.7% QoQ to Rs 2008.3 crore (vs our Rs 1,988 crore estimate) mainly led by 3.1% QoQ growth in general staffing while revenue for specialised staffing was flat QoQ to Rs 141 crore (vs our expectation of Rs138 crore). Revenue for other HR services was down 6.1% QoQ to Rs 29 crore (vs our expectation of Rs 32 crore), which was negative surprise considering Q3 is strong quarter
EBITDA was flat QoQ to Rs 31.6 crore (vs our expectations of Rs 28 crore) while margins came down by 5 bps due to higher other expenses
The company reported PAT came in at Rs 29 crore vs our estimate of Rs 28 crore
View: The company’s margin performance was flat QoQ despite some improvement in general staffing on account of weaker margin performance in Specialised staffing (furlough impact) and other HR services (billing shifted to Q4 despite rendering services while costs are front loaded). The company indicated that near term outlook remains challenging on revenue growth in both general staffing and specialised while other HR services are expected see some recovery. On Margins & Profitability, it would be either flat or down in Q4 indicating near term pain. The company’s realisation (PPAM) remained flat from last 2-3 quarters which has been a pain point for some time now. We will come out with an update soon.
Impact: Negative