Accumulate TeamLease Services; target of Rs 2450: Prabhudas Lilladher

Prabhudas Lilladher is bullish on TeamLease Services has recommended accumulate rating on the stock with a target price of Rs 2450 in its research report dated March 21, 2018.

Prabhudas Lilladher's research report on TeamLease Services

Flexi staffing business in India appears to be in a sweet spot led by multiple dynamics playing in favour of the sector. Scope for increase in formal employment in the country (currently at 14% of overall employee base) as well as increased share of outsourced employee base within the formal employee base are the key macro drivers. While increased hiring of contract employees in select industries (BFSI, Retail, eCommerce, Logistics, Telecom) has been the key growth driver for flexi staffing companies over FY13-FY17, we believe FY18-FY20E could see a pick-up in Manufacturing vertical as well.

Outlook

We like TeamLease owing to its leadership position in General staffing, asset light model, strong Technology platform which aids in non-linearity (Associate/Core employee ratio). Retain Accumulate with target price of Rs2,450/sh (35x FY20E EPS).

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