TeamLease, one of India’s top recruiting firms, swings to a loss as it moves to a new tax regime
- Indian staffing company
TeamLease Servicesclocked a loss of ₹29.4 crore between January and March 2020, compared to a profit of ₹26 crore the same time last year.
- This was largely due to a ₹49.6 crore one-time charge taken by the company to move to the new tax regime.
- While the revenue has dipped 1% to ₹1,345 crore.
- The announcement was made after market hours. Teamlease’ share price was up by 3.7% before the earnings were out.
Without that, the profit for the quarter would have been ₹20.2 crore. While the revenue has dipped 1% to ₹1,345 crore.
Advertisement“We are currently going through unprecedented times and have thus far managed the situation reasonably well, whether it be in terms of connecting with our clients, employees and other stakeholders. We are optimistic at the prospects of growth reviving and do believe that the formal staffing industry would stand to gain from the economy opening up and simplification of labour laws,” said Ashok Reddy, MD at TeamLease Services.
The announcement was made after market hours. Teamlease’ share price was up by 3.7% before the earnings were out.
The lockdown impact
On March 22, the Indian government announced a nationwide lockdown in the wake of coronavirus and the businesses were required to shift to remote working setup overnight. Its business operations were impacted significantly, as India went into a complete lockdown mode.
“The lockdowns and restrictions imposed on various activities due to COVID — 19 pandemic have posed significant challenges to all the businesses of TeamLeese and its Subsidiaries. The Company's operations were impacted substantially from 17" March 2020 till the third week of May 2020, when lockdown was gradually lifted. All offices were shut down during the period,” the company said in a statement earlier.
The company acquired elearning platform SchoolGuru and regulatory technology solutions company Avantis to capitalise on the possibilities of growth spurred by the global pandemic. “We have utilized the lockdown period to be more efficient, the results of which should flow into the future,” Reddy added.
AdvertisementGoing forward, the company is connecting with its stakeholders to gauge the impact of the COVID situation. On June 4, TeamLease said that it is in talks with the policy makers so as to recommend mitigation policies. However, “these are very early days but the company expects normalcy to be achieved only after a quarter” or in fact, a couple of quarters.
TeamLease added nearly 4,000 employees this financial year, taking the total employee count to 220,000 as on March 31, 2020. Its digital arm for hiring the staffing business contributed to 20% of the total hiring for the quarter, the company announced, adding that the hirings are expected to grow by 40% in the next three quarters.
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