(Reuters) – India’s TeamLease Services reported an 8.3% drop in third-quarter profit on Wednesday, below Street expectations, dragged down by a jump in expenses.
The staffing services provider’s consolidated net profit fell to 284.3 million rupees ($3.29 million) for the three months ended Dec. 31, from 310 million rupees a year ago.
Analysts, on average, expected a profit of 310.5 million rupees, according to data compiled by LSEG.
Its shares dropped 2% after the results.
A 19% rise in Teamlease’s employee costs and a 34% jump in its subcontracting expenses pushed total expenses higher by 19.7% to 29.03 billion rupees.
In the third quarter, staffing companies were hurt by headwinds in the banking, financial services and insurance (BFSI), and consumer packaged goods sectors, and as hiring was delayed because of the festive season, analysts have said.
Revenue from TeamLease’s general staffing segment – which contributes over 90% to the total – rose 20%.
Revenue from its smaller specialised staffing business, which includes IT staffing services, dropped 7%.
Its total revenue rose by 19.5% to 29.21 billion rupees, above analysts’ average expectation of 28.67 billion rupees.
“…we are planning to expand sales operations of IT staffing in Singapore and Middle East. Headwinds in BFSI may continue for staffing business on account of recent regulations issued by RBI (Reserve Bank of India),” TeamLease Managing Director Ashok Reddy said in a statement.
Peer Quess Corp is expected to post results later in the day.
($1 = 86.5225 Indian rupees)
(Reporting by Aleef Jahan in Bengaluru; Editing by Mrigank Dhaniwala)
