📢 5 STEPS TOWARDS WEALTH 🚀 The Indian Stock Market Way

📍 Delhi | 22nd March 2025 | Saturday / 🕕 5:59 PM - 9:01 PM (Entry from 5:30 PM onwards)

1800 890 4317

profitfromit1@gmail.com

TEAMLEASE: CMP: 2639 Long Term Growth: 19% CYear Growth: 16% | Q1_FY24 Result Update 7th Sept

Lesson 70/223 | Study Time: 5 Min

Course: Top Quality Companies

TeamLease Services is one of India’s leading human resource companies offering a range of solutions to 3500+ employers for their hiring, productivity and scale challenges. A Fortune India 500 company listed on the NSE & BSE, TeamLease has hired 19 lakhs+ people over the last 21 years. One of India’s fastest growing employers, TeamLease also operates India’s first Vocational University and India’s fastest growing PPP Degree Apprenticeship Program. The Company offers solutions to large, medium and small clients across the 3Es of employment (over 2.9 lakhs employees), employability (over 5 lakhs students) and Ease-of-doing Business (over 1000 employers). In FY2015, TeamLease rolled out DA (Degree Apprenticeship) to provide on-the-job training to apprentices.

Founded in 2001 and came with the IPO during 2016 at price of 850 & yes, we have recommended it during IPO itself as the wealth creator company from emerging industry and multiyear rally along with consistent profitability. Pre_IPO we saw their sales growth from 700 Cr to 2500 Cr and hence we have assumed 20% plus sales growth in the future. Last Year in 2023 their sales were 7870 Cr as estimated. They have strong market share of 6% in their industry. Pre IPO during 2011 they were making losses but they came in Profits in 2014 and during the IPO profits were 25 Cr. It grew from 25 Cr to 111Cr till last year. A low debt company with high growth and a strong vision. Post IPO we got several opportunities to buy during falls.

This Q1 headcount fell by (-2%) as estimated as we saw the fall of 1% in headcount during Q4_21. We saw sales growth of 16% despite a fall in headcount. General Staffing which contributes 90% sales, added net ~13k headcount in Q1FY24 taking the total

billable headcount to ~2.37 lakhs. We saw the fall in revenue in both the segments of Specialized Staffing & HR Services.

Hence, we should be prepared for the challenges industry is facing in hiring due to muted industry growth of IT. Despite the growth in sales, we saw a fall in profits of 4%. This year we may see sales growth of 15% but profits may fall by 2%. So lifetime high sales this year can be expected but profits are not expected lifetime high. We should not expect the breakout even this year till the challenges stay in IT hiring. This could be a good opportunity to buy such a wonderful company for long-term wealth.

We can add more during any fall near 2500 & a recovery back towards 4600 this or next year can be expected. Technically we have seen the BOT in Quarterly as well as Half yearly basis. This year we may see the stock move in the long range of 2500 to 4600 where buying can be done near 2500 and can book some 5% profits again near 4600. We may see Teamlease reach landmark sales of 10000 Cr in just 2 years & can reach the landmark profits of 500 Cr till 2031. Multiyear rally can be seen in such a case. Team Lease is from an emerging industry and still they are in aggressive expansion mode they do not distribute dividends and instead use the money for inorganic growth. We can expect dividends after a few years once consistent growth is visible. Can allocate a 1.75% weightage in the portfolio expecting long term growth of 15%, but should be prepared that current scenario is challenging. FPI holds around 37% while MF & Insurance Companies hold around 21%, Retail Investors have just an 8% share.

Disclosure: Do Not Buy or sell before consulting your advisor as the writer may have the position in the above-given stocks or indices

Previous Lesson Next Lesson

Piyush Patel

Product Designer

4.75

Profile

Class Sessions