TeamLease Services (TEAMLEASE) Q4 15/16 earnings summary

Executive summary

• FY2016 operating revenue rose 24.8% YoY to Rs.25,049.18mn; operating EBITDA increased 17.6% to Rs.259.40mn, while PAT declined amid sharply higher tax expense.

• Associate headcount increased by over 14,000 from an opening base of 94,647; average monthly markup per associate rose 7% to Rs.687.

• Client base grew from 1,200+ to 1,400+; all HR service businesses turned positive at EBITDA and PBT levels during FY2016.

Financial highlights

• Standalone operating revenue was Rs.25,049.18mn versus Rs.20,070.70mn in FY2015; PBT rose 9.5% to Rs.373.08mn.

• Standalone PAT fell 24.7% to Rs.242.86mn from Rs.322.54mn; tax provision increased to Rs.130.22mn from Rs.18.04mn.

• Consolidated revenue was Rs.25,049.18mn; EBITDA was Rs.257.81mn, up 7.2%, PBT Rs.378.21mn, up 16.1%, and PAT Rs.247.99mn, down 19.4%.

• Consolidated basic and diluted EPS was Rs.15.92 versus Rs.20.08 in FY2015.

Outlook and guidance

• Industry estimates projected Indian flexi-staffing growth of 20–25% CAGR from 2013–14 to 2018–19, with penetration rising from 0.4% to 1.0%.

• Formal workplace employment was projected to grow 9–10% CAGR from 2011–12 to 2018–19; flexi-staffing industry value was forecast at Rs.610–640bn by 2018–19.

• Strategic priorities include scaling staffing through technology and operational excellence, broadening HR services, pursuing strategic acquisitions and maintaining an asset-light model.