TeamLease Services; target of Rs 2700: JM Financial
JM Financial’s research report on TeamLease Services
TeamLease Services Ltd. (TEAM), India’s largest organised flexi – staffer, is at the cusp of red e fining its long – term growth trajectory with several favourable factors likely to play out over the next decade. Market leadership (5 – 7% share) with an established track record of operational excellence ( associate – to – core employee ratio – 203x) gives it pole position to reap the benefits of the flexi – staffing industry ’s imminent formalisation. Entry in the high – margin IT staffing business will further aid profitability.
BUY, TP of INR 2700: TEAM currently trades at 32x/25 x on FY19/20 E EPS. Given its long – term growth potential , stable management and strong balance sheet , we assign TEAM a multiple of 35 x on FY20 E EPS (and a PEG of 1. 3 5 ) to arrive at our TP of INR 2700.
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