TeamLease Q2 profit falls 7% to Rs 26 crore despite growth

TeamLease Services Limited reported Q2 FY27 operating revenue of Rs 3,076 crore, up 2.3% year on year, but profit after tax fell 7% to Rs 26 crore and the reported PAT margin declined to 0.8% from 0.9%. Revenue growth therefore did not produce higher quarterly earnings.

Why did TeamLease profit fall in Q2 FY27?

TeamLease reported profit after tax, or PAT, of Rs 26 crore in Q2 FY27, compared with Rs 28 crore in Q2 FY26 and Rs 34 crore in Q1 FY27. PAT margin was 0.8%, versus 0.9% a year earlier and 1.1% in the preceding quarter. The company labels the Q2 FY27 PAT figure as before an exceptional item.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, were Rs 36 crore in Q2 FY27, down 6% from Rs 38 crore in Q2 FY26. EBITDA margin declined to 1.2% from 1.3%, although EBITDA recovered 12% from Rs 32 crore in Q1 FY27. PAT nevertheless declined 25% sequentially, from Rs 34 crore.

How much did TeamLease revenue grow in Q2 FY27?

TeamLease grew Q2 FY27 operating revenue by 2.3% year on year and 1.4% quarter on quarter to Rs 3,076 crore. Revenue was Rs 3,006 crore in Q2 FY26 and Rs 3,035 crore in Q1 FY27. The year-on-year revenue increase was Rs 70 crore, while EBITDA and PAT were each Rs 2 crore below their Q2 FY26 levels.

For H1 FY27, TeamLease reported operating revenue of Rs 6,111 crore, a 4.0% increase from Rs 5,876 crore in H1 FY26. EBITDA declined 2.7% to Rs 68 crore from Rs 69 crore and margin moved to 1.1% from 1.2%. In contrast, H1 PAT rose 14% to Rs 60 crore from Rs 53 crore, with margin increasing to 1.0% from 0.9%.

Management separately said operating EBITDA grew 11% year on year in H1 FY27. The financial-performance page reports Q2 EBITDA of Rs 36 crore, while the offering-contribution page reports operating EBITDA of Rs 44 crore and a 1.4% margin. The presentation does not reconcile these separately labelled measures.

What does TeamLease's revenue mix show about margins?

TeamLease derived 92.0% of Q2 FY27 revenue from General Staffing, down from 92.6% in Q2 FY26 and 92.2% in Q1 FY27. Specialised Staffing represented 6.1%, compared with 5.5% a year earlier, while Other HR Services contributed 1.9%, unchanged year on year. The group’s revenue base therefore remained concentrated in General Staffing.

General Staffing contributed 66.3% of operating EBITDA in Q2 FY27, down from 68.5% in Q2 FY26 and 75.6% in Q1 FY27. Specialised Staffing contributed 30.2%, close to 31.0% a year earlier, while Other HR Services contributed 3.5% after a negative 6.2% contribution in Q1 FY27. The operating-EBITDA contribution disclosure reports a 1.4% group margin for Q2 FY27.

Other HR Services revenue rose to Rs 58 crore from Rs 57 crore in Q2 FY26 and Rs 50 crore in Q1 FY27. Ed Tech accounted for 67.8% of segment revenue, Compliance Solutions for 26.0%, and HR Tech Solutions for 6.2%. TeamLease said losses in the segment narrowed year on year through revenue growth and recovery of prior-period dues, without stating the segment’s absolute profit or loss.

What changed in TeamLease's staffing operations?

TeamLease's General Staffing and Apprenticeship headcount was 3,25,500 in Q2 FY27, down from 3,54,950 in Q2 FY26 and 3,33,700 in Q1 FY27. The company reported net headcount added of negative 8,200 in Q2 FY27 and negative 7,430 for H1 FY27. Consumer represented 28.2% of General Staffing headcount, followed by banking, financial services and insurance at 20.8% and telecom at 18.0%.

The industry composition shifted during the year. Banking, financial services and insurance declined to 20.8% of General Staffing headcount from 25.9%, while telecom rose to 18.0% from 15.9% and industrial increased to 8.2% from 7.1%. General Staffing and Apprenticeship recorded more than 62,500 gross joinees, 32 client additions and first-time job seekers equal to 30% of gross associates in Q2 FY27.

Specialised Staffing headcount increased to 7,670 in Q2 FY27 from 7,050 in Q2 FY26 and 7,630 in Q1 FY27. Global capability centre, or GCC, tech accounted for 35.0% of the segment and GCC Specialised for 25.0%, up from 30.0% and 20.0% respectively a year earlier. IT Services declined to 36.0% of headcount from 48.0%.

How does TeamLease plan to fund higher-margin adjacencies?

TeamLease management said it held Rs 350 crore of net free cash after its buyback and was positioned to invest in people, brand, technology and new merger-and-acquisition opportunities. It also said the company completed the divestment of its 30% holding in Crystal HR with no loss on capital invested. The presentation does not disclose an acquisition target, transaction value or timetable.

Management said it aims to build a holistic talent-solutions portfolio in which every business adds to overall margin, and described Q2 outcomes as below its aspirations. TeamLease added 114 new Corp ID logos in Q2 FY27 and 241 in H1 FY27. Specialised Staffing added 20 clients, while Apprenticeship added 13 client logos during the quarter.

Specialised Staffing reported cost per hire of Rs 19,500, down 7% year on year, more than 1,100 gross additions and net headcount added of 40 in Q2 FY27. Management said the business was anchored by more than 130 GCC clients. These indicators accompany the stated focus on higher-margin adjacencies, though General Staffing continued to account for 92.0% of quarterly revenue.

Conclusion

TeamLease delivered higher Q2 FY27 revenue but lower profit, with PAT falling to Rs 26 crore and reported EBITDA margin at 1.2%. General Staffing remained the dominant source of revenue, while Specialised Staffing expanded headcount and GCC exposure. Other HR Services returned to a positive operating-EBITDA contribution after a negative contribution in Q1 FY27.

The next disclosed issues to watch are management’s deployment of Rs 350 crore in net free cash, progress toward higher-margin adjacencies and whether new logos convert into revenue and margin gains. Future disclosures may also clarify the difference between the reported EBITDA figures and the separately presented operating-EBITDA measures.