TeamLease Q4 Revenue and Profit Slip Despite Adding 10,000 Employees

TeamLease Services, a leading staffing firm, reported a mixed bag of results for the fourth quarter ending March 31, 2024. Despite the addition of 10,000 employees, the company’s revenue and profit after tax (PAT) saw declines, reflecting challenges in certain sectors.

Quarterly Financial Performance

TeamLease’s profit after tax (PAT) dropped by 10% quarter-on-quarter to ₹28 crore in Q4 FY24, down from ₹31 crore in the previous quarter. Revenue also slipped marginally by 1% to ₹2,441 crore, compared to ₹2,455 crore in Q3 FY24.

However, the company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose by 2% to ₹37 crore, maintaining an EBITDA margin of 1.5%. This indicates a slight improvement in operational efficiency despite the revenue dip.

Operational Highlights

The firm added 10,000 employees during the quarter, bringing the total headcount to 3,19,030 by the end of FY24. This represents a 13% increase from the previous year’s total of 2,82,450.

Reflecting on specific business units, TeamLease added 44,000 billable headcount in FY24, totaling 2.67 lakh. However, staffing revenue remained flat on a quarter-on-quarter basis due to festive billings in Q3 FY24.

Sectoral Insights

Ashok Reddy, Managing Director of TeamLease Services, highlighted positive volume growth momentum across FMCG, FMCD, Retail, Ecommerce, Telecom, and other emerging verticals. Despite a setback in BFSI hiring over the past few months, the outlook for the second quarter of FY25 appears promising.

In the degree apprenticeship unit, trainee headcount growth turned positive, driven by the National Apprenticeship Promotion Scheme (NAPS) and Work Integrated Learning Program (WILP). The remaining NEEM trainees are expected to fully attrite by Q1FY25.

The IT industry’s headwinds continued to impact growth and profitability in specialized staffing. Conversely, the HR Services unit saw revenue grow by 36% and EBITDA by 41% for the quarter, with full-year revenue up by 14% and EBITDA up by 92% year-on-year, largely due to seasonality in the edtech business.

Cash Position

TeamLease’s net cash stood at ₹345 crore, including free cash of ₹265 crore. The company also reported an outstanding income tax receivable of ₹264 crore.

Outlook

Reddy expressed optimism about the firm’s growth trajectory, stating, “The volume growth momentum in staffing is quite positive across multiple sectors. While we have had a slight setback on BFSI hiring, the outlook from Q2 FY25 is shaping up well. The DA business has now turned positive on headcount, net of the exit of NEEM trainees.”

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