TeamLease Q1 results: Net profit drops 21.3% to Rs 20.79 cr on weak demand

India's TeamLease Services posted a smaller-than-expected quarterly profit on Wednesday, hurt by higher expenses and weak demand in its specialised IT staffing business.

The company, which hires and trains people before helping them find jobs, said its consolidated net profit dropped 21.3 per cent to Rs 20.79 crore ($2.48 million) year-on-year in the three months ended June 30, below analysts' estimate of Rs 24.17 crore, as per LSEG data.

Expenses rose 19 per cent to Rs 2,574 crore, hurt by salary hikes and higher employee benefits costs.

Revenue from its specialised IT staffing services business climbed 3.6 per cent, whereas that from its general staffing business rose 20 per cent.

Staffing solutions providers have been impacted by companies in the information technology sector slowing down hiring amid an uncertain macroeconomic environment and tech clients cutting spending on non-essential projects.

Headwinds in the IT industry continue to impact the growth in the company's specialized staffing business. While there has been consistent growth in GCC clients, net headcount loss with IT services clients was noted in the quarter, the company said in an exchange filing.

Total revenue for the company rose 18.8 per cent to Rs 2580 crore.

Teamlease's shares closed 1.02 per cent higher ahead of results.