 "December quarter results: Analysts expect tepid numbers")
Indian staffing firm TeamLease Services Ltd on Wednesday reported a drop in quarterly profit hurt by slowing revenue growth and higher expenses.
The Bengaluru-based company said profit fell 3.4% to 289.6 million rupees ($3.55 million) in the quarter ended Dec. 31, while revenue rose 14% to 20.08 billion rupees, the lowest in seven quarters.
The revenue growth was well below the 20%-40% increase the company had clocked over the last six quarters.
TeamLease had benefited from the rise in demand for IT-trained candidates during the pandemic and for flexi-staffing, through which firms hired staff temporarily solely on a need or demand basis.
However, the need for IT-trained employees fell as tech companies in India reigned in their spending, with clients in North America and Europe tightening their purse strings amid looming recession fears.
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"Weak festive demand in general staffing and headwinds in specialised staffing impacted our growth rates this quarter," TeamLease Managing Director Ashok Reddy said in a statement.
The company's revenue from specialised staffing services, which includes its IT-trained staffing service, rose 3.6% to 1.41 billion rupees in the quarter.
At 7%, its contribution to consolidated total revenue was the lowest in nearly four years.
TeamLease's results were also hurt by a 15% rise in employee benefit expenses, which led to its core profit margin falling from 2.1% to 1.6%.
The company's shares closed 3% lower at 2,365 rupees. ($1 = 81.5280 Indian rupees)
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