TeamLease Services (TEAMLEASE) Q4 20/21 earnings summary

Executive summary

• FY21 was disrupted by COVID-19 lockdowns and a weak first quarter, but second-half recovery and strong Q3-Q4 headcount growth helped restore much of the first-half decline. All businesses exceeded pre-COVID levels by year-end.

• Consolidated operating revenue was ₹4,88,145.67 lakh; adjusted EBITDA, before exceptional/non-business expense, was ₹97.4 crore, up 5% YoY.

• Digitalization, formal employment, flexible workforce models and regulatory reforms are viewed as drivers of future demand; management plans to invest in acquisitions, technology and human capital.

Financial highlights

• Consolidated revenue from operations fell to ₹4,88,145.67 lakh from ₹5,20,072.26 lakh; EBITDA excluding other income rose to ₹9,742.09 lakh from ₹9,300.93 lakh.

• Consolidated PBT was ₹8,853.62 lakh versus ₹8,297.40 lakh; PAT was ₹7,847.47 lakh versus ₹3,497.53 lakh; EPS was ₹45.33 versus ₹20.46.

• Revenue declined 6.14% YoY, EBITDA increased 4.74%, PAT increased 124.37% and EPS increased 121.56%, as reported in the financial highlights.

• Operating cash flow reached ₹30,332.74 lakh consolidated; free cash flow was reported at ₹250 crore, with prior-year tax refunds contributing to improved cash conversion.

Outlook and guidance

• Management expects formalization, regulatory reforms and employers’ shift toward flexible workforce mixes to support growth, while planning investments in inorganic growth, technology and human capital.

• The FY22 IMF GDP growth forecast for India was revised to 12.5% in April 2021; renewed COVID waves, inflation, supply disruption and strained health and fiscal capacity pose downside uncertainty.

• Cash on books, sanctioned credit lines and forecast operating cash flows were assessed as adequate for debt servicing and minimal development-pipeline capital spending.