Investec downgrades TeamLease Services to sell, lowers target price to Rs 2,350

Investec has downgraded TeamLease Services to sell from buy in the long term and lowered target price to Rs 2,350 from Rs 3,200. The stock ended down 2.2% at Rs 2,526.15 on Wednesday while the BSE Sensex closed 231.80 points up (+0.57%) to 41,198.66.

Company Financials

For the quarter ended 31-12-2019, the company has reported consolidated sales of Rs 1351.40 crore, up 6.59% from last quarter sales of Rs 1267.80 crore and up 15.28% from last year same quarter sales of Rs 1172.23 crore. The company has reported net profit after tax of Rs 25.89 crore in the latest quarter.


The company’s top management includes Mr.Ashok Reddy, Mr.Manish Mahendra Sabharwal, Mr.Narayan Ramachandran, Mr.V Raghunathan, Mr.Zarir Batliwala, Mrs.Latika Pradhan. Company has S R Batliboi & Associates LLP as its auditors. As on 31-12-2019, the company has a total of 17,096,769 shares outstanding.

Investment Rationale

Growth was soft in a quarter that’s seasonally strong with associate additions of 2,186 versus 7,548 in the same period last year, said Investec. While the revenue weakness can be attributed to the weaker macro, FY20 will be a year of earnings declines, said Investec.