TEAMLEASE SERVICES LIMITED

Recommendation history

• Q4 2026BuyBuy: TeamLease exited FY26 with improving earnings quality despite a one-off 20,000-associate NBFC insourcing, delivering FY26 EPS of INR83 (+28%), EBITDA growth of 14%, and Q4 PBT growth of 30% YoY. FY27 starts with 20,000 open positions and management targets EBITDA growth above 20%, while INR600 crore of net cash and a INR1,600-per-share buyback provide support; however, Q4 revenue fell 2% sequentially to INR2,925 crore and enterprise-staffing margins are expected to remain broadly flat.
• Q3 2026HoldHold: Q3 showed improving profitability but not yet a clean operating recovery. Group revenue grew 8% YoY, EBITDA rose 22% YoY and 11% QoQ, while margins benefited from digitization, cost control and seasonal EdTech billing; however, 27,000 associates were lost to client insourcing, general-staffing headcount fell to 2.82 lakh, and management gave no quantified Q4 or FY26 earnings outlook. The recovery case rests on 16,000 open positions, positive Q4 headcount growth and GCC-led specialized staffing, but execution, margin normalization and leadership-transition risk remain unresolved.
• Q2 2025HoldHold: Q2 showed improving demand and operating leverage, with revenue up 5% QoQ, EBITDA up 24% QoQ and 25% YoY, 11,000 net billable additions, and management expecting about 25% FY26 EBITDA growth. However, general-staffing EBITDA and absolute margins remain broadly flat, PAPM has not improved, specialized-staffing margins lag competitors, and HR-tech needs another two quarters of sales investment—making the recovery credible but not yet a clean buy.
• Q1 2025HoldHold: Q1 showed solid operating leverage, with revenue up 12% YoY, EBITDA up 39% including 4% from acquisitions, PAT/PBT up about 30%, and 5,000 billable headcount additions. Management expects at least 30% YoY EBITDA growth in each remaining quarter, but the recovery is not yet proven: general-staffing headcount growth was only 5%, open positions were about 20,000 versus over 30,000 last year, PAPM was flat, and BFSI/IT demand remains soft.
• Q4 2025HoldHold: FY25 revenue grew 20% but EBITDA rose only 6% and PBT was flat, while billable headcount additions fell to 27,000 from 37,000 and Q4 saw an 8,000 decline. The recovery case rests on BFSI demand normalizing, 30,000 open positions converting, and productivity/HR-tech benefits, but PAPM fell to INR665, IT staffing remains weak, and management gave no company-wide FY26 growth guidance.
• Q3 2025HoldHold: Q3 revenue rose 19% YoY and 4% QoQ, while EBITDA increased 4%; staffing added 1,300 associates despite seasonal weakness. However, management expects a marginal general-staffing headcount decline in Q4, with BFSI representing about 22% of staffing revenue and headcount, while specialized staffing remains below peak and EdTech profitability is dependent on a lumpy Q4 catch-up.
• Q2 2024HoldTeamLease delivered strong volume growth, with general-staffing revenue up 26% YoY and 16,000 net associate additions in Q2, but profitability remains structurally constrained: staffing PAPM fell to INR6.70 from INR6.79 and specialized-staffing revenue declined slightly. Q3 is expected to be relatively muted because of BFSI regulatory pressure and slower IT-services hiring, while the INR20-crore Hire Tech investment has no quantified ROI yet. The call supports a hold, not a clean buy.