Q1 net profit falls by 13.8% for HR firm, TeamLease Services

According to the Company, the profitability of HR services was adversely affected due to delayed collections and the provisions that had to be made following the same.

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The consolidated net profit of human resources firm, TeamLease Services, was Rs 18.8 crore, which indicates a drop of 13.8 year-on-year (YoY).

The Company’s total income for the quarter ended 30 June, was Rs.1254.70 crores, while the income for the period that ended on 31 March, was Rs.1168.57 crores.

The net profit was Rs.18.79 crores for the period ended 30 June, 2019.

While there was a growth of 23 per cent in overall revenue YoY to Rs 1,251.2 crore in Q1, the earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 13 per cent YoY to Rs 22.7 crore in Q1FY20.

In the quarter that ended 30 June, the Company acquired the IT staffing unit of eCentric Solutions for Rs 27.09 crore, through its subsidiary, TeamLease Digital. eCentric is a staffing and recruitment services providing company that caters to the information technology (IT) sector.

However, the scene for the forthcoming quarters looks better. The headcount addition and markups in the staffing business seem to have improved significantly in Q1. The Company’s technology investments in products of Avantis and Fresher’s World are in aligment with its future plans.

While there was a growth in general staffing of 23 per cent YoY to Rs 1,130.6 crore, there was also a 26 per cent reduction in revenue YoY, to Rs 22.4 crore in Q1, in the other HR services.

According to the Company, the profitability of HR services was deeply affected—to the tune of Rs 6 crore — due to the delayed collections and the provisions that had to be made following the same. These provisions are expected to be reversed in the second and third quarters.

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