Motilal Oswal has given Buy recommendation for TeamLease recommended buy rating on the stock with a target price of Rs 4000 in its research with a target price of Rs. 4000 in its research report issued on Jun 10, 2021

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.