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    Teamlease Services Limited

    TEAMLEASEGood
    Services·5 Nov 2025
    Management Summary

    TeamLease Services delivered a consistent Q2 FY26, marked by robust headcount additions and strong financial growth. The company reported a 5% QoQ increase in revenue and operating growth, leading to a 24% QoQ rise in EBITDA. All three employment businesses contributed to net growth, with specialized staffing and degree apprenticeship showing particular momentum, supported by strategic client acquisitions and policy advancements.

    Highlights

    9

    • Net headcount addition of over 7,000, with 3% QoQ growth at company level.

    • Total operating and revenue growth of 5% QoQ.

    • EBITDA grew 24% QoQ and 25% YoY.

    • PBT grew 10% QoQ and 20% YoY, with PAT also up 20% YoY.

    • Added over 140 new logos across the company.

    • Staffing business saw net headcount addition of over 8,000, a 3% QoQ growth.

    • Specialized Staffing added 300 hires, growing 18% QoQ and 17% YoY.

    • Degree Apprenticeship added 2,600 apprentices, with operational PAPM increasing by Rs. 11.

    • Free cash balance stands at Rs. 320 crores.

    What Changed3

    vs Q3 FY26

    Guidance items7 → 5 (-2)Risks discussed4 → 3 (-1)Q&A highlights7 → 3 (-4)

    Key financials

    Single quarter

    09 metrics
    1. 01Revenue Growth—+5%QoQ
    2. 02EBITDA Growth—+25%YoY
    3. 03PBT Growth—+20%YoY
    4. 04PAT Growth—+20%YoY
    5. 05Net Headcount Addition7,000 count

    Segment breakdown

    Specialized Staffing (GCC)
    62% Net Revenue Contribution
    Global Business
    4% Net Revenue Contributionpositive status EBITDA Status
    List

    Guidance & targets

    5
    CategoryTargetPriority
    Profitability
    EBITDA growth in staffing
    double-digit growth
    		Medium
    Profitability
    Group EBITDA growth
    25% year-on-year growth
    		High
    Profitability
    Profit growth vs. Revenue growth
    higher than our revenue growth
    		Medium
    Business Outlook
    HR-tech business contribution
    sizable number both in terms of revenue as well as bottom line contribution
    		Medium
    Business Outlook
    Company type (EBITDA or CAGR)
    healthy, double-digit, high-teen kind of EBITDA or CAGR company
    		Low

    Risks & concerns

    3
    RiskSeverity

    New RBI directives for the NBFC sector

    Potential headwinds that could impact the recovery in BFSI hiring, as seen with prior regulatory curbs on unsecured lending. — Management acknowledged

    medium

    New government guidelines or notifications

    Continuous incremental notifications from the government could impact business depending on sectors or specific timelines, requiring vigilance. — Management acknowledged

    medium

    Market fragmentation impacting PAPM and transition to variable pricing

    The fragmented nature of the market makes it difficult to achieve an annual high kind of transition to variable markups, putting pressure on PAPM. — Management acknowledged

    low

    Q&A highlights

    3

    “Yes, you are right, for this quarter, as far as staffing is concerned, there is only a linear improvement in EBITDA in line with the revenue growth. And overall contribution has come from cost optimization that has been driven at group level across as well as improvement in billing for ed-tech business... it would take two more quarters for the HR-tech business to get into a sizable number both in terms of revenue as well as bottom line contribution, because right now the investment that is going in is mainly in terms of sales.”

    Clarifies the drivers of current EBITDA growth (cost optimization) and provides a timeline for the HR-tech business to become a significant contributor to profitability.

    asked by Deep Shah

    2 min read7 chapters

    Detailed Narrative

    01

    Q2 FY26 Performance Overview

    TeamLease Services reported a consistent Q2 FY26, achieving a net addition of over 7,000 headcount, representing a 3% quarter-on-quarter growth at the company level. Total operating and revenue growth stood at 5% QoQ, which translated into a 24% growth in EBITDA and a 10% growth in PBT. The company also successfully added over 140 new client logos during the quarter, indicating robust business development.

    02

    General Staffing Business Momentum

    The general staffing business demonstrated strong recovery, closing the quarter with a net headcount addition of over 8,000, a 3% quarter-on-quarter increase. Notably, 23% of these additions came from new client acquisitions, and over 20,000 new joinees were onboarded, 17% higher than the previous quarter. The company's FTE productivity improved to 382, enabling efficient management of headcount growth without additional overhead.

    03

    Specialized Staffing and GCC Growth

    Specialized Staffing, particularly driven by the Global Capability Centers (GCCs) segment which contributes about 62% of overall net revenue, added approximately 300 hires. This segment experienced an 18% quarter-on-quarter and 17% year-on-year growth. The global business also became EBITDA positive, contributing about 4% of net revenue, with 21 new logos onboarded, reflecting successful expansion in Tier 2 IT services and digital transformation.

    04

    Degree Apprenticeship Expansion and Policy Support

    The Degree Apprenticeship business added around 2,600 apprentices across NAPS, NATS, and WILP programs, with operational PAPM increasing by Rs. 11. The government's recent amendments to the Apprenticeship Act in September 2025, including revised stipend levels (up to Rs. 12,300) and formal recognition of degree apprenticeships, are expected to significantly boost the apprenticeship ecosystem.

    05

    Financial Health and Working Capital

    On a group level, revenue increased 5% QoQ, with EBITDA growing 24% QoQ and 25% YoY. PBT and PAT both grew 20% YoY. The company maintained stable balance sheet metrics, with Days Sales Outstanding (DSO) in the staffing business at 7 days and overall DSO at 15 days. TeamLease reported a healthy free cash balance of Rs. 320 crores, indicating strong working capital management.

    06

    Outlook and Growth Drivers

    Management expressed optimism for the coming quarters, expecting demand to be more positive than in the first two quarters, with all three businesses (General Staffing, Specialized Staffing, Degree Apprenticeship) believed to have bottomed out and set for continued growth. The company aims for a 25% year-on-year EBITDA growth by the end of the year and expects profit growth to outpace revenue growth due to economies of scale and portfolio play.

    07

    Policy and Regulatory Environment

    While generally positive, management remains watchful of potential headwinds from new RBI directives concerning the NBFC sector, which could impact hiring. They also acknowledged the continuous nature of government notifications and policy changes, which could influence sectoral demand or operational frameworks, though they do not anticipate a 'black swan🌐 event.' The recent Apprenticeship Act amendments are seen as a significant positive.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.