Team Lease Serv.

TeamLease reported Q4 FY26 operating revenues of INR2,925 crores, reflecting a 2% sequential decline primarily due to the full quarter impact of an NBFC in-sourcing. Despite this, the company demonstrated strong profit growth, with EBITDA growing 8% sequentially and 14% for the full year. PBT increased 30% year-on-year for Q4 and 36% for the full year, while PAT grew 22% for Q4 and 33% for the full year. The full year EPS stood at INR83, a 28% increase over the previous year, with an EBITDA margin of 1.5% in Q4 and 1.34% for the full year.

General staffing closed Q4 with 2.87 lakh associates, adding over 4,500 associates sequentially. For the full year, while net headcount showed a decline of roughly 5,500 due to the Q3 NBFC transition, the underlying business actually added about 14,000 associates. The company added 120 new logos over the full year and improved recruiter productivity by 20% year-on-year. The global business also grew by 200% in terms of revenue, contributing to margin accretion.

Management highlighted key focus areas for FY27, including profitable growth, deepening client relationships, and leveraging operating leverage. They believe India's formal employment market is at an inflection point, with factors like rate cuts, income tax relief, EPFO, PLI schemes, and GCC waves creating significant opportunities. The company aims to capture these by focusing on the right sales, product mix, and cost structure, while investing in technology and talent.

The Specialised Staffing business diversified across skills and sectors, with PAPM realization increasing by 17% and PBT growing by 15%. GCCs remain a cornerstone, contributing 60% of associate headcount and 67% of revenues, with partnerships spanning over 110 GCCs. While traditional IT skills demand moderated, there's a steady rise in hiring for AI developers, integrators, R&D, and specialized functional roles, allowing the company to move up the value chain with integrated workforce solutions and bot models.

The Degree Apprenticeship (DA) business recorded a net addition of about 1,000 apprentices in Q4 FY26, maintaining PAPM stability and adding 10 new client logos. Strong momentum is observed in the GCC segment, manufacturing, BFSI, retail, and logistics. Long-term growth is expected to accelerate due to the expansion of the Prime Minister Internship Scheme PMIS 3.0 with an allocated budget of INR4,788 crores, and sustained policy focus on manufacturing growth through 'Make in India' initiatives.

The Board approved a buyback of up to 25% of free reserves at a price of INR1,600 per share, to be funded from existing free cash. The company reported net free cash of INR600 crores at the end of Q4, following the receipt of INR106 crores in income tax refund. Outstanding TDS receivables stood at INR149 crores, and the company maintains virtually no debt, reflecting strong financial health and capital discipline.

For FY27, the company targets upwards of 20% bottom-line growth, with a planned exit of 10,000 low-margin headcount in Q1 and Q2 FY27, though positive headcount growth is expected by H1 end. Key uncertainties include potential transition costs across the industry from the 4 labor codes, which are expected to create some costs through FY27. Additionally, uneven discretionary consumption and broader geopolitical risks, such as energy price inflation and supply chain disruptions, are being closely monitored.