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TeamLease Services Q1 results: Net profit up over 57% to Rs 27 crore; company appoints new chairman

The total revenue grew 21 percent YoY to Rs 1,381.3 crore. Narayan Ramachandran as its new Chairman while Manish Sabharwal has transitioned to the role of Executive Vice Chairman.

July 28, 2021 / 02:50 PM IST
 
 
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Human resource solutions provider Teamlease Services posted a 57.4 percent year-on-year (YoY) rise in its June quarter (Q1) net profit at Rs 26.91 crore.

The total revenue grew 21 percent YoY to Rs 1,381.3 crore. EBITDA margin stood at 2.1 percent.

Ramani Dathi, the chief financial officer of TeamLease Services told Moneycontrol that there was an impact on incremental growth in headcount sequentially due to lockdown restrictions in April and May. However, she said the trend has been positive in the month of June 2020.

After its board meeting held on July 28, TeamLease Services announced the appointment of Narayan Ramachandran as the new Chairman (non-executive).

Ramachandran is currently the Lead Independent Director and has been on the Board of the Company since 2015. With this, executive chairman Manish Sabharwal has transitioned to the role of Executive Vice Chairman. In addition, Dathi who was the deputy CFO has been re-designated as the chief financial officer.

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Dathi said that having a chairman in a non-executive role will bring a lot of value addition on the corporate governance and risk management front.

When it comes to business growth, Dathi said that the company was able to grow the headcount on a YoY basis by 20 percent to 2,26,000 in Q1FY22.

"In the second wave we did not lose any headcount. So corporate India is managing it well. With lockdown restrictions being lifted and vaccination picking up pace, we expect numbers to bounce back to pre-COVID levels," she added.

On the general staffing front, the largest contribution came from e-commerce, telecom and consumer verticals in the first quarter.

Looking ahead

Dathi said the upcoming festive season in Q2 and Q3 would also aid in headcount addition. On the investment and acquisitions space, she explained that the company has increased its investment in Avantis RegTech to 60 percent with performance linked structure and completed the acquisition of 100 percent stake in IMSI Staffing.

"We are in advanced discussions on the M&A pipeline. Both these discussions are in staffing space, one in general staffing and one in specialised staffing. This is also because we have Rs 200 crore of free cash. A large part of the cash balances will be used for M&A activity and a small amount for internal investments, capacity expansion," she added.

The company said that specialised staffing had a net associate addition of over 10 percent and 27 new logos in the current quarter. Dathi said that the company will be expanding its presence in this segment which is a high-margin business.

"We will be entering new segments like gaming, energy, OTT and health-tech because these are industries that are growing rapidly with high margins," she added.

In anticipation of the third wave and based on the experience of the second wave, Dathi said that the impact on the business would be minimal and that there won't be a reduction in headcount.

Preparing for this, Dathi explained that the company has converted a majority of fixed costs into variable costs. This included reduction of office costs and taking up co-working spaces.
Moneycontrol News
first published: Jul 28, 2021 02:45 pm
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