Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- TeamLease Services Ltd (BOM:539658, Financial) reported a significant headcount addition of 18,000 in Q2 FY25, indicating strong growth in staffing.
- The company achieved a 26% year-on-year revenue increase in Q2, showcasing robust financial performance.
- TeamLease Services Ltd (BOM:539658) added 37 new client logos in Q2, reflecting successful client acquisition strategies.
- The company is investing in a high-tech platform expected to enhance hiring efficiency and reduce costs, set to go live in FY26.
- Specialized staffing saw an EBITA increase of 18% year-on-year, driven by cost optimization and strategic focus on high-margin projects.
Negative Points
- Specialized staffing experienced a net de-growth, although stabilization is expected in future quarters.
- The BFSI sector faces regulatory scrutiny, potentially impacting growth in Q3.
- High input costs and inflation have led to flat performance in core consumer businesses.
- Subcontracting costs have increased significantly, impacting overall cost structure.
- General staffing P/APM saw a marginal decline, affecting profitability despite efficiency improvements.
Q & A Highlights
Q: Can you elaborate on the expected growth in the general staffing business for the next quarter?
A: Ashok Nedurumalli, Co-Founder, Managing Director, Director, mentioned that while growth is anticipated, the BFSI sector might mute the extent of this growth due to certain RBI regulations. However, other sectors continue to show demand, and overall, the outlook remains positive.
Q: What is the reason behind the increase in subcontracting costs, and how does it affect margins?
A: Ramani Dathi, CFO, explained that the increase in subcontracting expenses is specific to the specialized staffing business due to vendor aggregation at IT companies. This increase aligns with business growth and does not significantly affect overall margins.
Q: Can you provide more details on the investment in the high-tech platform and its expected benefits?
A: Ramani Dathi, CFO, stated that the company plans to invest around 20 crore INR over 18 months in a high-tech platform to optimize hiring costs and improve recruiter productivity across general staffing, specialized staffing, and the entire employment cluster.
Q: What is the outlook for IT staffing, given the current market conditions?
A: Neeti Sharma, CEO of Specialized Staffing, noted that while there are open positions, closures are taking longer. Growth is expected from GCCs and non-tech sectors, with a positive net addition anticipated from Q3 onwards.
Q: How does the company view the impact of the employment-linked incentive scheme on its growth?
A: Kartik Narayan, CEO of Staffing, mentioned that the scheme's details are awaited, but it is expected to positively impact the degree apprenticeship and staffing businesses, aligning with government focus on employment and formalization.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
