TeamLease Services (TEAMLEASE) Q4 19/20 earnings summary

Executive summary

• FY20 consolidated revenue rose 17% YoY to ₹5,200.72 crore, with 88% of growth organic; EBITDA was nearly flat at ₹93.01 crore.

• Consolidated PAT fell to ₹34.98 crore from ₹98.03 crore, largely reflecting a one-time ₹49.58 crore MAT credit write-off after adopting the lower-tax regime.

• COVID-19 drove severe near-term uncertainty, while formal staffing, skills investment and digital HR services were identified as longer-term opportunities.

Financial highlights

• Consolidated revenue from operations reached ₹5,200.72 crore vs ₹4,447.60 crore in FY19; PBT was ₹82.97 crore vs ₹96.41 crore.

• Consolidated EBITDA was ₹93.01 crore vs ₹94.08 crore; PAT was ₹34.98 crore vs ₹98.03 crore, and diluted EPS was ₹20.46 vs ₹57.34.

• Standalone revenue from operations grew to ₹4,783.38 crore from ₹4,132.47 crore; standalone PAT was ₹41.58 crore vs ₹97.02 crore.

• Consolidated operating cash flow was ₹9.69 crore vs an outflow of ₹12.37 crore; management cited 77% EBITDA-to-operating-cash-flow conversion excluding withholding-tax effects.

Outlook and guidance

• FY21 forecasts were internally revised amid COVID uncertainty; cash on hand, sanctioned credit lines and forecast operating cash flow were assessed as adequate for debt service and minimal planned capex.

• Management expected margins to remain at similar levels, with activity varying by industry; associate headcount reductions and a moderate fall in collections were anticipated.

• Institutional Learning Services exposure will be reduced, with lower revenue in FY21 and FY22 and a planned exit by FY22; permanent recruitment exposure is also being cut.

• Longer-term opportunity areas include flexible staffing, apprenticeships, digital learning and HR digitization; their addressable markets may expand as formalization accelerates.