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.
"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.
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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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