India's TeamLease posts Q3 profit drop as revenue growth slows, costs rise

Teamlease Services

25/01/2023 10:41

BENGALURU, Jan 25 (Reuters) - Indian staffing firm
TeamLease Services Ltd  TLSV.NS  on Wednesday reported a drop in
quarterly profit hurt by slowing revenue growth and higher
expenses.
    The Bengaluru-based company said profit fell 3.4% to 289.6
million rupees ($3.55 million) in the quarter ended Dec. 31,
while revenue rose 14% to 20.08 billion rupees, the lowest in
seven quarters.
    The revenue growth was well below the 20%-40% increase the
company had clocked over the last six quarters.
    TeamLease had benefited from the rise in demand for
IT-trained candidates during the pandemic and for
flexi-staffing, through which firms hired staff temporarily
solely on a need or demand basis.
    However, the need for IT-trained employees fell as tech
companies in India reigned in their spending, with clients in
North America and Europe tightening their purse strings amid
looming recession fears.
    "Weak festive demand in general staffing and headwinds in
specialised staffing impacted our growth rates this quarter,"
TeamLease Managing Director Ashok Reddy said in a statement.
    The company's revenue from specialised staffing services,
which includes its IT-trained staffing service, rose 3.6% to
1.41 billion rupees in the quarter.
    At 7%, its contribution to consolidated total revenue was
the lowest in nearly four years.
    TeamLease's results were also hurt by a 15% rise in employee
benefit expenses, which led to its core profit margin falling
from 2.1% to 1.6%.
    The company's shares closed 3% lower at 2,365 rupees.
 
 ($1 = 81.5280 Indian rupees)
 (Reporting by Nandan Mandayam in Bengaluru; Editing by Savio
D'Souza and Sohini Goswami)
 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))