Team Lease Services Ltd's Q3FY19 consolidated net profit rises 1.3% qoq to Rs25cr: Misses Estimates

The company’s consolidated revenue stood at Rs1,172cr, up 7.5% qoq and 27.7% yoy.

Jan 29, 2019 04:01 IST India Infoline Research Team

Team Lease Services Ltd Q3FY19

Consolidated Results Q3FY19: (Rs in cr)

Q3FY19 QoQ (%)
Revenue 1,172.23 7.5
EBITDA 24.52 2.0
EBITDA Margin (%) 2.1 [11]
Net Profit (adjusted) 25.26 1.3
***EBITDA margin change is bps
TeamLease Services Ltd reported a mixed set of numbers for Q3FY19. The top-line grew 27.7% yoy and 7.5% qoq to Rs1,172.23cr against median consensus estimates of Rs1,145cr. EBITDA came in at ~Rs25cr, up 37.1% yoy and 2.0% qoq against median consensus estimates of Rs26cr. The EBITDA margin expanded 14bps yoy, but contracted 11bps qoq to 2.1%. Reported PAT grew by 37.3% yoy and 1.3% qoq to ~Rs25cr against median consensus estimates of Rs27cr.
  • General Staffing and Allied Services revenue grew by 26.3% yoy and 8.6% qoq. Margins improved 4bps yoy and 26bps qoq to 2.0%.
  • Specialized Staffing Services revenue came in at Rs79cr in Q3FY19 vs. Rs59cr in Q3FY18. Revenue growth on qoq basis was 4.7%. Margins declined 305bps yoy and 152bps qoq to 6.2%.
  • Other HR Services revenues stood at Rs31cr in Q3FY19 vs. Rs19cr in Q3FY18. Other HR services margins contracted 304bps yoy and 979bps qoq to 0.3%.
  • Associate/trainee headcount increased by ~34,000 on yoy basis and ~11,300 on qoq basis. The current associate headcount is ~1,52,600 and the NETAP trainee headcount is ~52,500.
  • General staffing associates/trainees to staffing core employees improved to 260 in Q3FY19 from 241 in Q2FY19 and from 219 in Q3FY18.
  • The company reduced its funding exposure to 15% in the general staffing business from 22% in Q3FY18 and maintained efficient working capital management.
  • The company completed acquisition of stake in Avantis RegTech effective November 1, 2018.
  • Average realization (mark-up) per associate stood at Rs710 p.m., lower than that in prior quarters on account of volume mandates and reduced funding exposure.
  • During Q2FY19, Teamlease had acquired additional equity stake of 21% in Cassius Technologies Private Limited (CTPL). The company has the option to acquire balance 49% equity stake at an agreed price. Accordingly, CTPL has been accounted for as a 100% subsidiary with effect from July 31, 2018. Hence, the results are not comparable on yoy basis (also on account of other acquisitions such as Evolve Technologies).

Technical View:

Team Lease Services Ltd is currently trading at Rs. 2,531, down by 16.7 points or 0.66% from its previous closing of Rs. 2,547.70 on the BSE.
The scrip opened at Rs. 2,523.75 and has touched a high and low of Rs. 2,545 and Rs. 2,509.15 respectively. So far 2,997 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 50 DMA.

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