TeamLease shares soar 14% post Q1 result; will the rally sustain?

TeamLease Services shares saw the steepest rally in over 1 year after it reported strong Q1 numbers; analysts remained bullish on a medium to long-term basis

Shares of TeamLease Services rallied over 14 per cent on Friday after the company reported strong first-quarter numbers, with analysts positive on a medium to long-term basis. 

 

The human resource service provider's stock rose as much as 14.46 per cent during the day to ₹2,100 per share, the steepest intraday rise since July 23, 2024. The stock pared gains to trade 4 per cent higher at ₹1,895 apiece, compared to a 0.18 per cent decline in Nifty 50 as of 9:44 AM. 

 

Shares of the company snapped a two-day losing streak and currently trade at 88 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 35 per cent this year, compared to a 4.4 per cent advance in the benchmark Nifty 50. TeamLease Services has a total market capitalisation of ₹3,206.21 crore.   Track LIVE Stock Market Updates Here

 

TeamLease Services Q1 results

The company reported a 27.66 per cent year-on-year (Y-o-Y) rise in consolidated net profit to ₹26.54 crore for the quarter ended June 2025, compared with ₹20.79 crore in the same period last year. Revenue rose 12.08 per cent to ₹2,891.40 crore, up from ₹2,579.85 crore in the year-ago quarter.

 

The company’s general staffing segment saw a 5 per cent growth in headcount and an 11 per cent increase in revenue. TeamLease added 44 new clients in this vertical, with over 60 per cent of them opting for the variable staffing model.

 

Ebitda rose 39 per cent Y-o-Y, supported by consistent operating leverage and volume growth. Net free cash stood at ₹300 crore, excluding tax deducted at source (TDS) refunds of around ₹300 crore. 

Analysts on TeamLease results 

Antique Stock Broking said that TeamLease reported revenue below its expectations. The modest growth was attributed to seasonality in the EdTech segment, partially offset by gains in the Global Capability Centres (GCC) business.

 

However, management remains optimistic about the upcoming quarters, citing volume-led growth with 20,000 open positions, which is expected to support margin expansion, it said. 

 

Antique trimmed its earnings per share (EPS) estimates for FY26 and FY27 by 5 per cent and 4 per cent, respectively, due to slower growth and a miss on margins. The brokerage maintained a 'Buy' rating with a revised target price of ₹2,300 per share (earlier Rs 3,000).

 

The company's Q1 performance was slightly muted, impacted by ongoing hiring softness in the banking, financial services, and insurance (BFSI) and IT services sectors, Motilal Oswal said. While near-term demand remains uneven across select verticals, the brokerage remains optimistic on the company’s medium- to long-term growth prospects. 

 

The brokerage sees TeamLease as a key beneficiary of the ongoing formalisation of India’s labour market, supported by liberalisation efforts from both central and state governments. It expects healthy growth and margin recovery to drive a CAGR of 13 per cent in revenue and 28 per cent in earnings over FY25-27.

 

Motilal Oswal reiterated its 'Buy' rating with a target price of ₹2,200 apiece.