TeamLease Q2 Results Review - A Steady Quarter; Q3 Outlook Soft Amid BFSI, IT Hiring: Motilal Oswal

Motilal Oswal Report

TeamLease Services Ltd.'s Q2 FY25 revenue growth of 23% was in line with our estimate of +21% YoY. Revenue growth was fueled by 8% QoQ growth in general staffing (+25% YoY). Specialized staffing was down 1.5% QoQ (-1.3% YoY). Overall Ebitda margin of 1.2% was in line, backed by operating leverage in staffing business and growth in EDtech billing. Adjuisted profit after tax at Rs 249 million was down 10% YoY/28% QoQ.

The company's revenue grew 21% in H1 FY25, while Ebitda/PAT declined 4.1%/17.1% versus H1 FY24. We expect revenue/Ebitda/PAT to grow 15.5%/18.3%/60.8% YoY in H2 FY25.

We reiterate our Buy rating with a target price of Rs 3,550. However, we cut our target multiple to 27 times (from 30 times earlier) owing to the short-term uncertainty.

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