TeamLease Services Q3 results: PAT down 8.3% at Rs 28.4 cr on high expenses

India's TeamLease Services reported an 8.3 per cent drop in third-quarter profit on Wednesday, below Street expectations, dragged down by a jump in expenses.

The staffing services provider's consolidated net profit fell to Rs 28.43 crore ($3.29 million) for the three months ended Dec. 31, from Rs 31 crore a year ago.

Analysts, on average, expected a profit of Rs 31.05 crore, according to data compiled by LSEG.

Its shares dropped 2 per cent after the results.

A 19 per cent rise in Teamlease's employee costs and a 34 per cent jump in its subcontracting expenses pushed total expenses higher by 19.7 per cent to Rs 2,903 crore. 

In the third quarter, staffing companies were hurt by headwinds in the banking, financial services and insurance (BFSI), and consumer packaged goods sectors, and as hiring was delayed because of the festive season, analysts have said.

Revenue from TeamLease's general staffing segment - which contributes over 90 per cent to the total - rose 20 per cent.

Revenue from its smaller specialised staffing business, which includes IT staffing services, dropped 7 per cent.

Its total revenue rose by 19.5 per cent to Rs 2,921 crore, above analysts' average expectation of Rs 2,867 crore.

"...we are planning to expand sales operations of IT staffing in Singapore and Middle East. Headwinds in BFSI may continue for staffing business on account of recent regulations issued by RBI (Reserve Bank of India)," TeamLease Managing Director Ashok Reddy said in a statement.

Peer Quess Corp is expected to post results later in the day.