TeamLease Services (TEAMLEASE) Q1 24/25 earnings summary

Executive summary

• Consolidated revenue for Q1FY25 grew 19% year-over-year to ₹2,594 crore and 6% sequentially, with group headcount up by ~12,700 and 187 new client logos added.

• EBITDA declined 40% sequentially and 16% year-over-year to ₹22 crore, with margin at 0.9%, reflecting margin pressures from EdTech seasonality, delayed billing, and annual appraisals.

• General Staffing saw a net addition of ~15,500 associates, 8% revenue growth quarter-on-quarter, and 21% year-on-year, with total billable headcount at ~2.82 lakh.

• Specialized Staffing experienced a 17% year-on-year headcount drop and continued IT sector headwinds, but revenue increased 4% year-on-year as focus shifted to higher-margin mandates.

• EdTech business was impacted by delayed university billing and regulatory changes but is expected to rebound strongly in Q2 and Q3.

Financial highlights

• Consolidated revenue for Q1FY25 was ₹2,594 crore, up 6% QoQ and 19% YoY; operating revenue reached ₹2,580 crore.

• EBITDA was ₹22 crore, down 40% QoQ and 16% YoY; EBITDA margin at 0.9%.

• PAT was ₹19 crore, down 31% QoQ and 25% YoY; PAT margin at 0.7%.

• Free cash balance improved to ₹320 crore after a ₹115 crore tax refund; net cash position at ₹439 crore as of June 30, 2024.

• EPS (basic and diluted) was ₹12 for Q1FY25.

Outlook and guidance

• Management expects margin and profit improvement from Q2 FY25 as negative impacts subside, with EdTech and DA businesses projected to contribute positively.

• Specialized Staffing expected to benefit from increased tech hiring and cost optimization, though IT headwinds persist.

• Labour code implementation and government employment initiatives are expected to drive formalization and productivity.