Buy TeamLease; target of Rs 4000: Motilal Oswal
Motilal Oswal is bullish on TeamLease recommended buy rating on the stock with a target price of Rs 4000 in its research report dated June 10, 2021.
June 14, 2021 / 02:40 PM IST
Motilal Oswal's research report on TeamLease
TEAM delivered an in line performance in 4QFY21, with total revenue increasing 5% QoQ. Revenue growth was led by the General Staffing business (+5.5% QoQ) - general staffing and NETAP trainee headcount increased by 16k (+8% QoQ). Margin in 4QFY21 were stable, despite an impressive improvement in FTE productivity (352 v/s 334 in 2Q), led by continued customer discounts. It reported an adjusted PAT of INR268m, implying a PAT margin (in line) of 2%. TEAM remains optimistic about a recovery in long term growth. We expect the revenue impact in 1QFY22E, on account of the second COVID wave induced lockdowns, to be much more manageable than FY21. We expect a quicker recovery in the General Staffing business and expect 24% revenue CAGR in this segment over FY21-23E.
We marginally reduce our FY22E estimate by 2% to factor in revenue impact from the ongoing lockdown. Our TP of INR4,000/share implies 41x FY23E EPS. Reiterate Buy.
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