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Last Updated : May 21, 2018 06:16 PM IST | Source: Moneycontrol.com

Buy Teamlease Services; target of Rs 3300: HDFC Securities

HDFC Securities is bullish on Teamlease Services has recommended buy rating on the stock with a target price of Rs 3300 in its research report dated May 17, 2018.

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HDFC Securities' research report on Teamlease Services


Teamlease reported good set of numbers for 4QFY18 with beat on both revenue and  margins.  Revenue  stood  at  Rs  9.78bn up 6.5% QoQ vs our est. of Rs 9.68bn.  Growth  was  led by staffing segment (+5.1% QoQ, 90.3% of rev) and specialised  staffing  (+24.0% QoQ, 7.3% of rev, led by full quarter impact of  Evolve  acquisition).  EBITDA margin expansion (+38bps QoQ to 2.3%) was encouraging  and  stood higher than our estimate of 2.0% led by richer mix.

Outlook

We  earlier  added back the NPV of the tax benefits availed under 80JJAA to the  normalized  earnings giving 40x multiple. After receiving clarity from the  management about the longer term nature of the tax benefit, we are now applying the same multiple to the reported earnings. We maintain BUY with a TP of Rs 3,300 based on 40x FY20E EPS.

For all recommendations report, click here


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First Published on May 21, 2018 06:16 pm
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