Prabhudas Lilladher has given Buy recommendation for TeamLease Services with a target price of Rs. 4136 in its research report issued on Jun 10, 2021

Prabhudas Lilladher’s research report on TeamLease Services

Teamlease (TEAM) reported slight miss on revenue, +5% QoQ (Ple: 6.5% QoQ) due to impact of covid in March 21. Growth was led by strong General Staffing and NETAP trainees’ headcount, +8% QoQ, 4% YoY surpassing precovid levels. Specialized staffing declined by 3.3% QoQ due to reduction of low margin accounts but saw strong demand for high margin mandates like AI, ML, cyber security, Devops in IT services. HR services also grew improved sequentially but was down 34.4% YoY due to exit from permanent hiring business and government training business. Second wave of COVID has impacted new hiring and slowed down decision making and can result in muted performance in 1QFY21. However, management is confident of strong recovery post easing of lockdown restrictions.


We continue to value TEAM on 40X multiple on FY23 EPS 103.4 to arrive at target price of 4136. (earlier: 4002) At CMP, the stock trades at 50.4x/35.2x multiple on FY22/23 EPS of 72.1/103.4. Maintain BUY.