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TeamLease Services Q3 Results: Net Sales and PAT to grow at CAGR of 20% and 47%; Overweight

Firstcall India Equity | 12 Mar, 2018  | Follow Author | Add to my Favourites 
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Consolidated net profit rose by 99.67% at Rs. 183.98 mn in the current quarter as against Rs. 92.14 mn in the corresponding period of the previous year.

Consolidated revenue for the 3rd quarter rose by 12.73% to Rs. 9180.63 mn from Rs. 8144.22 mn, in the corresponding period of the previous year. During Q3 FY18, consolidated EBIDTA was Rs.221.11 mn as against Rs. 161.26 mn in the corresponding period of the previous year.

Consolidated PBT of the company stood at Rs. 188.97 mn in Q3 FY 18 as compared to Rs. 140.31 mn in Q3 FY 17.

Consolidated EPS of the company for Q3 FY 18 stood at Rs. 10.76 as compared to Rs. 5.39 per share in the corresponding previous year.

Associate/ trainee headcount increased by 32,000 on YoY basis and by 15,000 on QoQ basis. The current associate headcount is 137,000 and NETAP trainee headcount is 40,500.

Average mark-up per employee per month (PEPM) for staffing associates increased to Rs. 755 in Q3 FY18 from Rs. 735 in Q2 FY18.

Team Lease Services received approval from the Reserve Bank of India (RBI) for increase in the Foreign Portfolio Investment (FPI) limit under Portfolio Investment Scheme from 24% to 75% of the paid-up capital of the Company.

The Revenue for 9M FY 18 registered a growth of 18.99% at Rs. 26466.38 mn as compared to Rs. 22242.57 mn in the Q3 FY 17.

PAT during the 9M FY 18 registered at Rs. 522.40 mn as compared to Rs. 244.15 mn in the corresponding previous year 9 months period, up by 113.97%.

Industry Outlook:

The overall workforce is expected to grow at a CAGR of 2-3% during 2011-12 to 2018-2019. Sectors such as manufacturing, financial, real estate and business services and retail will continue to have a relatively higher proportion of the workforce. Sectors such as IT enabled services and banking, financial services and insurance are expected to have relatively higher growth in overall employment as compared to other sectors.


At the current market price of Rs. 2185.00, the stock P/E ratio is at 52.33 x FY18E and 47.54 x FY19E respectively.

Earning per share (EPS) of the company for the earnings for FY18E and FY19E is seen at Rs. 41.75 and Rs. 45.97, respectively.

Net Sales and PAT of the company is expected to grow at a CAGR of 20% and 47% over 2016 to 2019E, respectively.

On the basis of EV/EBITDA, the stock trades at 42.20 x for FY18E and 37.15 x for FY19E.

Price to Book Value of the stock is expected to be at 8.26 x and 7.03 x for FY18E and FY19E respectively.

Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

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About Firstcall India Equity

Firstcall India Equity of Firstcall India Equity Advisors Pvt. Limited (FIEA), is a leading financial services provider in India and a SEBI Registered Category-I Merchant Banker. FIEA is a culmination of a credible Equity Research Capabilities, Long Standing Relationship with leading FIIs, DFIs, MFs, Overseas Pension Funds etc. The company’s research caters to the needs of the largest news wire and media houses of the world namely Reuters, Thomson, Capital IQ,, Emerging Markets Euro money Publications-UK. The Company is among the major players in the Debt and Equity markets.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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