TeamLease is among India's Leading Human Capital Management Company. TeamlLease Services resource company 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, TeamlLease has hired 20 lakhs+ people over the last 22 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 2.3 lakhs employees), employability (over 5 lakhs students) and Ease-of-doing Business (over 1000 employers).
The company started operations in 2002 with 4 offices and 40 employees with 20 clients. Acquired ASAP Info Systems &Niche Proo Techno to Offer IT staffing services. 1st round of PE investment by Gaja Capital was done in fy_2009. Came up with the IPO in fy_2016 and listed on BSE and NSE. We have recommended the company since IPO for long term wealth. Since then they grew both the way organic as well as inorganically. Acquired Keystone business Solutions to strengthen IT Staffing. Acquired 30% stake in FW.com. Acquired Evolve Tech. to enter Telecom Staffing Business. Acquired 40% Stake in Online Education Co. Schoolguru. Acquired 33.33% stake in Avantis - RegTech during fy_2018. Acquired IT Staffing vertical of Ecentric in April 2019 and IMS| (ITInfra) in Nov.2019. During Fy_2020 Raised stake to 100% in FW.com . Acquired further 36.17% stake in Edtech in Sep-20. Acquired 4.89% equity stake in Avantis in Oct-20. Last year Surrendered PF Trust and migrated to EPFO. Fy_22 Became India's largest IT come on board Staffing.
Due the above acuisitions we saw their headcount grow from 1.87 Lakh to 2.85 Lakh till fy_2022. We saw revenue grow from 700 Cr during fy_2011 to 2500 Cr during the IPO in 2016 while last year they reached revenue around 7900 Cr shows the growth of 18% CAGR. Hence, we saw that they were making losses till fy_2013 made the profits of 25 Cr during the IPO in 2016 while last year they reached the landmark of 111 Cr Profits. Yes, post IPO we saw them grew their sales and Profits and hence we saw the appreciation from 1000 to 5000 during this 6 Years. As they are from emerging industry, they do not distribute dividends right now.
Fy_2023 Results: At the group level, revenue grew over 21% but Headcount was (-1%) this year which is negative. General Staffing which contributes for around 91% of total revenue, grew by 23%. Special Staffing and HR Services which combined revenue is around 9% share grew muted with 7% and 13% respectively. “General staffing business has witnessed uniform growth across industry verticals with a strong outlook for upcoming quarters. But yes, Margins have come under pressure due to external variables impacting the higher margin businesses of Specialized staffing and DA. Total cost grew by 22%. Hence there was the fall in the margin this year to just 1.2%. Growth in profits was seen by 185% only due to low base which was seen as there was an exceptional loss last year. Hence we should understand that Core count is down by 8% as compared to Q2 shows the effect of slowdown.
We may see the revnue growth of 12% this year with the affected margin and hence profits could fall by 5%. Hence those holding since long can add more during the current correction near 1338 which we may see the recovery back towards 4746 one headcounts starts increasing. We may Teamlease move in the long range of 1338 to 4766 for next 2 years.
Overall, in the country like India where we may need 10 Cr jobs this decade, hence demand should be seen on the longer run in the company who is leading in this space. we may see Teamlease reach around 25000 Cr revenue till the year 2031. Mulityear rally should be expected and when time would come as company grow's well dividends distribution can also be expected.
During The IPO the FPI use to Hold around 12% stake while today they hold 36%. Even MF & Insurance which use to hold 13% have raised their stake to 26%. ICICIPruMF who already hold 5% stake just added around 39000 shares this May.
Disclosure: DISCLOSURE: FOR EDUCATION PURPOSES, DO NOT TREAT AS A RECOMENDATION
Research by: CSPradhan (Investment Advisor, ProfitFromIT)
