India's TeamLease Services returns to profit growth on strong general staffing business

Teamlease Services

30/01/2024 11:15

BENGALURU, Jan 30 (Reuters) - India's TeamLease Services
 TLSV.NS  reported a return to profit growth on Tuesday after
four straight quarters of falls, as steady growth in the general
staffing business made up for weak demand for specialised IT
staffing services.
    The company, which hires and trains people in several skills
before supporting their placements, said its consolidated net
profit rose 7% to 310 million Indian rupees (nearly $4 million)
in the three months ended Dec. 31.
    Overall consolidated revenue from operations rose nearly 22%
to 24.45 billion rupees.
    Steady hiring in the banking, financial services and
insurance (BFSI) and consumer verticals helped the company notch
strong growth in its general staffing business.
    Revenue from the general staffing business, which accounted
for about 92% of the total, rose nearly 23%. 
   Meanwhile, revenue from the specialised business rose 12.3%,
even as key IT clients slowed or delayed hiring.
    The $245-billion-worth Indian IT industry has slowed after
gaining immensely from the pandemic-induced boom in digital
services, as clients slashed spending on discretionary projects
amid inflationary pressures. 
     "Our operating margins are improving steadily despite
sluggish demand in specialised staffing," Managing Director
Ashok Reddy said in a statement.
    TeamLease's core profit margin expanded to 1.5% from 1.4%
sequentially.
    The company's Degree Apprenticeship (DA) business saw a net
positive trainee headcount growth during the third quarter,
aided by several government and private training programs.
    DA business has turned net positive for the first time after
the withdrawal of the National Employability Enhancement Scheme
(NEEM), Reddy said adding that the scheme was discontinued in
December 2022 and previously hurt quarterly results.
    

($1 = 83.1091 Indian rupees)

 (Reporting by Dimpal Gulwani in Bengaluru; Editing by Janane
Venkatraman)
 ((Dimpal.Gulwani@thomsonreuters.com;))