Team Lease Serv. Q1 FY27 Results (NSE: TEAMLEASE)
Signal: Growth reaccelerated
The read
Revenue growth decelerated to +5.8% YoY (from +12% in Q1FY26 and +23% in Q2FY25), the slowest pace in at least 2 years, signaling a cooling staffing cycle. The PAT beat (+38% YoY) is flattered by a low base (Q1FY26 PAT was ₹25 Cr, the weakest in ~8 quarters) and a deferred tax credit of ₹1.57 Cr in Q1FY27. Excluding other income (+70% YoY) and the tax tailwind, operating profit grew a more modest ~25%. The standalone parent showed an outright 2% YoY PAT decline, confirming that the growth is coming from subsidiaries, not the core staffing business. The buyback of 8.87% equity at ₹1,600 per share (vs CMP ₹1,299) signals management's view that the stock is undervalued, but the revenue deceleration trend warrants caution.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,034.69 Cr | 5.8% | 3.8% |
| EBIT | ₹49.33 Cr | 24.8% | |
| Net profit | ₹34.45 Cr | 37.8% | |
| EPS | ₹20.79 | 31.4% | |
| EBIT margin | 1.2% |
P&L walk
Revenue growth slowed to +5.8% YoY (lowest in 2 years) as the staffing cycle cools; PAT jumped 38% YoY mainly due to a low base in Q1FY26 when net profit was ₹25 Cr, helped by a deferred tax credit
Segments
No segment disclosure in this filing — the consolidated group includes 11 subsidiaries and 1 joint venture, but the filing does not break out individual segment revenue or profit
Key positives
- Consolidated PAT grew 37.8% YoY to ₹34.5 Cr, the highest Q1 in at least 3 years
- EPS improved to ₹20.79 (+31.4% YoY), tracking PAT growth
- Employee cost grew slower than revenue (+5.4% vs +5.8%), providing slight operating leverage
- Buyback of 8.87% equity at ₹1,600 per share — 23% premium to CMP — signals management confidence
- Other income rose 70.3% YoY to ₹21.5 Cr, benefiting from the cash balance
Key concerns
- Consolidated revenue growth decelerated to +5.8% YoY — the lowest in 2 years, from +12% in Q1FY26 and +19% in Q3FY25
- Standalone PAT fell 2.1% YoY (₹24.3 Cr vs ₹24.8 Cr) — the core parent entity is shrinking on a YoY basis
- QoQ PAT dropped 25% from Q4FY26's ₹46 Cr — though seasonal, the magnitude suggests margin pressure in non-Q4 quarters
- Non-controlling interests swung to a loss of ₹0.42 Cr (vs loss of ₹1.53 Cr a year ago) — the subsidiaries that were loss-making aren't improving
Research and educational content only. Not investment advice.