Motilal Oswal Financial Services

2 August 2020

1QFY21 Results Update | Sector: Others

TeamLease

Buy

Estimate change

TP change

Rating change

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CMP: INR1848

TP: INR2,700 (+46%)

Better-than-expected operational metrics

Cautiously optimistic outlook



Bloomberg

Equity Shares (m)

M.Cap.(INRb)/(USDb)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

12M Avg Val (INR M)

Financials & Valuations (INR b)

Y/E Mar

2020 2021E

Sales

EBIT Margin (%)

1.3

1.8

PAT

0.8

1.0

EPS (INR)

48.9

57.7

EPS Gr. (%)

-14.7

18.1

BV/Sh. (INR)

335

392

Ratios

RoE (%)

15.0

15.9

RoCE (%)

5.8

14.0

Payout (%)

Valuations

P/E (x)

37.8

32.0

P/BV (x)

5.5

4.7

EV/EBITDA (x)

34.2

24.7

Div Yield (%)

TEAM IN

31.6 / 0.4

3192 / 1421

2/-21/-31



2022E



2.0

1.4

83.8

Lower-than-expected headcount decline; strong beat on margins

45.1

476



TeamLease reported revenue/EBIT/PAT growth of -9%/-4%/-9% YoY v/s our

19.3



17.3



22.1

3.9



17.7



General Staffing headcount decline (10% QoQ) in 1QFY21 came in lower

than initially expected (16–20% QoQ). Moreover, the segment

outperformed that of Quess (~15% QoQ decline). Despite the pressure on

mark-ups in the industry, it was impressive that realizations remained stable.

Aggressive cost rationalization enabled the company to report a strong beat

on margins. Stability in the share of working capital funded clients (14% of

the portfolio) and healthy cash conversion (OCF/EBITDA = 80%) are other

key positives.

The Government Training & Development and Permanent Recruitment

segments have been a drag on margins, receivables, and cash conversion for

some time. In this context, restructuring in these businesses is a key positive

and should unlock management bandwidth. Even as the management is

cautiously optimistic on prospects of growth recovery, we expect a good

rebound in General Staffing headcount over the next two quarters. In

conjunction with the aggressive cost rationalization measures in place, we

expect strong EBIT margin expansion (50bp to 1.8%) in FY21E.

Operationally, our estimates remain largely unchanged. We expect a ~31%

PAT CAGR over FY20–22E. Our DCF-based TP of INR2,700 implies 32x FY22E

EPS. Reiterate

Buy.

Shareholding pattern (%)

As On

Promoter

DII

FII

Others

Jun-20 Mar-20 Jun-19

40.0

40.3

14.5

10.5

7.0

40.0

41.0

45.1

5.5

8.5

7.6



FII Includes depository receipts



estimate of 0%/-25%/-11%.

Overall revenue was below our estimates as decline in Other HR Services

was higher than our expectations.

In General Staffing, headcount declined just 10% QoQ (v/s ~15% for Quess)

and revenue ~14% QoQ (v/s 22% for Quess). Overall headcount (incl.

trainees) declined ~14% QoQ.

Revenue from Specialized Staffing was resilient (-5% QoQ). However,

revenue from Other HR Services declined by more than half (~57% QoQ) as

the company is undergoing a planned exit from some of these services.

Overall EBITDA margins expanded ~70bp QoQ, led by aggressive cost

rationalization. Across segments, margin expansion during the quarter was

driven by IT Staffing.

Realizations in General Staffing remained stable despite the markup

pressure in the industry. While the company offered price concessions in

some mandates, the impact was offset by the addition of a higher markup

business during the quarter.

The company rationalized core employee headcount across segments. The

highest impact was seen in HR Services as it exits some parts of this segment

(Permanent Recruitment and Government Training).

While EBIT was ~28% above our estimates, lower-than-expected other

income led to largely in-line PAT.

TeamLease maintained working capital funding exposure at 14% of overall

general staffing operations. Cash conversion improved to 80%.

Sudheer Guntupalli – Research analyst

(Sudheer.Guntupalli@MotilalOswal.com)

Research analyst: Mohit Sharma

(Mohit.Sharma@MotilalOswal.com) /

Heenal Gada

(Heenal.Gada@MotilalOswal.com)

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Investors are advised to refer through important disclosures made at the last page of the Research Report.

TeamLease

Key highlights from management commentary



Valuation and view – Sharp re-rating on the horizon



The General Staffing headcount reduction of 10% in 1QFY21 was below the

management’s expectation of 16–20% at the start of the quarter. Active

dialogue with customers/associates, backfilling of open positions with unutilized

associates, and the addition of new clients helped mitigate the impact, to an

extent. Specialized Staffing was largely resilient.

Management is cautiously optimistic on the near-term outlook. The company

expects modest decline or flattish revenue in 2QFY21, followed by growth in

subsequent quarters.

Sectors such as Healthcare, IT, Pharma, Agriculture, E-Commerce, and FMCG are

expected to recover faster. Recovery should be driven by the metros.

The company rationalized its core employee headcount ~24% QoQ to 1544. A

major part of this rationalization came in the Permanent Recruitment and

Government Training businesses.

With the focus being on digitization and technology adoption, TeamLease does

not expect any substantial increase in core employees in the foreseeable future,

even as recovery kicks in.

Even as some costs in the employee cost structure are permanent, the

management expects some other costs to return as offices open up and travel

picks up. Nevertheless, the EBIT margin is expected to bounce back to FY19

levels (1.9%).

Price concessions given to some clients are for a limited duration and are

expected to end by 3Q.

The stock is still ~25% below pre-COVID-19 levels, weighed by concerns of

severe impact on General Staffing in the event of massive employee lay-offs.

However, we understand these concerns were exaggerated as the business /

cash collections did not witness any major dislocation over Mar–Jun'20. Lower-

than-expected headcount decline (~10% QoQ) and healthy cash conversion

(OCF/EBITDA = 80%) were impressive in the current context.

As the economy unlocks gradually and enterprises look to dodge supply

disruption, we believe the company/sector has already passed the peak of

uncertainty. Encouraging rebound in the unemployment situation (as reflected

in CMIE data) and the hiring outlook (as reflected in the recent TeamLease hiring

outlook survey) corroborate our view.

Given some level of uncertainty in the economy (due to the back and forth on

lockdowns), some of the otherwise permanent roles are also likely to be fulfilled

through flexi-staffing as employers attempt to keep their costs variable. We

noticed similar trends in the immediate aftermath of GFC and the

demonetization, when staffing companies benefitted due to positive hiring

trends in some verticals. Such a trend should likely play out in the near term,

benefitting staffing firms such as TeamLease.

Over the medium term, as both the central and state governments look forward

to liberalizing and formalizing the labor markets, TeamLease should be among

the biggest direct beneficiaries.

Stable realizations and aggressive cost rationalization should enable the

company to report robust margin expansion in FY21E.

Operationally, we keep our estimates largely stable. Our DCF-based TP of

INR2,700 implies 32x FY22E EPS. Reiterate

Buy.



2 August 2020

TeamLease

Consol. Quarterly Performance

12,512

22.5%

12,512

22.5%

12,281

232

1.9%

232

1.9%

171

1.4%

171

1.4%

178

-5

173

-15

-9%

188

-14%

1.5%

188

-14%

1.5%

(INR m)

Est. Var. (%

1QFY21 / bp)

12,505 -9%

-0.1%

12,505 -9%

-0.1% -911bQ

12,305 -10%

200 23%

1.6% 56bQ

200 23%

1.6% 56bQ

128 28%

1.0% 41bQ

128 28%

1.0% 41bQ

30 -14%

75 -45%

173 3%

-5

168 5%

0% 288bQ

168 2%

-11% 160bQ

1.3% 16bQ

168 2%

-11% 160bQ

1.3% 16bQ

Revenue

YoY Change (%)

Total income from operations

YoY Change (%)

Total Expenditure

Reported EBITDA

Margins (%)

Adj. EBITDA

Margins (%)

Depreciation

Reported EBIT

Margins (%)

Adj. EBIT

Margins (%)

Interest

Other Income

PBT before EO expense

Share of profit from associate

Reported PBT

Adj. PBT

Tax

Rate (%)

Reported PAT

YoY Change (%)

Margins (%)

Adjusted PAT

YoY Change (%)

Margins (%)

FY20

FY21E

2QE

3QE

12,678 13,514 13,303 11,364 11,819 12,646

16%

15%

14% -9.2%

-7%

-6%

12,678 13,514 13,303 11,364 11,819 12,646

16.2% 15.3% 14.3% -9.2% -6.8% -6.4%

12,433 13,239 13,104 11,119 11,535 12,318

245

275

199

246

284

329

1.9%

2.0%

1.5%

2.2%

2.4%

2.6%

245

275

261

246

284

329

1.9%

2.0%

2.2%

2.4%

2.6%

179

199

116

164

202

247

1.4%

1.5%

0.9%

1.4%

1.7%

2.0%

179

199

178

164

202

247

1.4%

1.5%

1.3%

1.4%

1.7%

2.0%

147

204

243

227

179

237

282

-9

-4

-3

195

238

224

176

234

279

195

238

214

176

234

279

-6

-16

518

-3%

-7% 232%

202

255

-294

171

234

279

-19%

1% -213%

-9%

16%

10%

1.6%

1.9% -2.2%

1.5%

2.0%

2.2%

202

255

192

171

234

279

-19%

-26%

-9%

16%

10%

1.6%

1.9%

1.4%

1.5%

2.0%

2.2%

4QE

13,152 52,007 48,982

-1%

17%

-6%

13,152 52,007 48,982

-1.1% 16.9% -5.8%

12,797 51,056 47,769

355

951 1,213

2.7%

1.8%

2.5%

355 1,013 1,213

2.7%

1.9%

2.5%

286

328

273

665

885

2.1%

1.3%

1.8%

273

727

885

2.1%

1.4%

1.8%

123

101

308

221

308

851 1,005

-5

-21

-13

303

830

992

303

820

992

480

58%

303

350

987

-203% -64% 182%

2.3%

0.7%

2.0%

303

836

987

58%

-15%

18%

2.3%

1.6%

2.0%

FY20

FY21E

Key Perf. Indicators

Y/E March

Headcount

General staffing associates

Apprentices

Specialised staffing

Core Employees

Revenue

General staffing

Specialised staffing

Other HR Services

Operating Margins

General staffing

Specialised staffing

Other HR Services

1,60,614

57,292

6,858

1,818

11,306

982

224

2.0

6.4

(28.3)

FY20

1,65,029

51,341

6,549

2,005

11,392

1,005

282

1.8

6.1

(1.3)

1,67,216

52,388

8,244

2,150

12,161

1,046

306

1.6

7.4

1.9

1,61,365

50,620

8,225

2,022

11,954

1,065

284

2.1

6.7

(13.8)

1,45,259

35,888

7,461

1,544

10,234

1,009

122

1.9

8.7

(36.7)

FY21

1,61,365

50,620

8,225

2,022

46,813

4,098

1,096

1.9

6.6

(9.2)

FY20

2 August 2020

TeamLease

Key highlights from management commentary



The General Staffing headcount reduction of 10% in 1QFY21 was below the

management’s expectation of 16–20% at the start of the quarter. Active dialog

with customers/associates, backfilling of open positions with unutilized

associates, and the addition of new clients helped mitigate the impact, to an

extent. Specialized Staffing was largely resilient.

Management is cautiously optimistic on the near-term outlook. The company

expects modest decline or flattish revenue in 2QFY21, followed by growth in

subsequent quarters.

Sectors such as Healthcare, IT, Pharma, Agriculture, E-Commerce, and FMCG are

expected to recover faster. Recovery should be driven by the metros.

The company rationalized its core employee headcount ~24% QoQ to 1544. A

major part of this rationalization came in the Permanent Recruitment and

Government Training businesses.

With the focus being on digitization and technology adoption, TeamLease does

not expect any substantial increase in core employees in the foreseeable future,

even as recovery kicks in.

Even as some costs in the employee cost structure are permanent, the

management expects some other costs to return as offices open up and travel

picks up. Nevertheless, the EBIT margin is expected to bounce back to FY19

levels (1.9%).

Price concessions given to some clients are for a limited duration and are

expected to end by 3Q.

Lower-than-expected headcount decline; strong beat on margins



TeamLease reported revenue/EBIT/PAT growth of -9%/-4%/-9% YoY v/s our

estimate of 0%/-25%/-11%.

Overall revenue was below our estimates as decline in Other HR Services was

higher than our expectations.

In General Staffing, headcount declined just 10% QoQ (v/s ~15% for Quess) and

revenue ~14% QoQ (v/s 22% for Quess). Overall headcount (incl. trainees)

declined ~14% QoQ.

Revenue from Specialized Staffing was resilient (-5% QoQ). However, revenue

from Other HR Services declined by more than half (~57% QoQ) as the company

is undergoing a planned exit from some of these services.

Overall EBITDA margins expanded ~70bp QoQ, led by aggressive cost

rationalization. Across segments, margin expansion during the quarter was

driven by IT Staffing.

Realizations in General Staffing remained stable despite the markup pressure in

the industry. While the company offered price concessions in some mandates,

the impact was offset by the addition of a higher markup business during the

quarter.

The company rationalized core employee headcount across segments. The

highest impact was seen in HR Services as it exits some parts of this segment

(Permanent Recruitment and Government Training).

While EBIT was ~28% above our estimates, lower-than-expected other income

led to largely in-line PAT.

2 August 2020

TeamLease



TeamLease maintained working capital funding exposure at 14% of overall

general staffing operations. Cash conversion improved to 80%.

Exhibit 1: Headcount decline was lower than initially expected

General staffing (ex-apprentices) headcount growth (YoY, %)

-10

Source: Company, MOFSL

Exhibit 2: Despite the markup pressure in the industry, realizations remained stable

RPAPM (INR)

739

730

710

714

751

748

751

Source: Company, MOFSL

Exhibit 3: Working capital funding exposure of TEAM remains stable at 14%

16%

15%

14%

WC Funding Expsoure

Source: Company, MOFSL

2 August 2020

TeamLease

Exhibit 4: Associate-to-core ratio improved on the back of headcount rationalization

Assosiate to Core employee Ratio

270

277

261

283

266

264

260

241

Source: Company, MOFSL

Valuation and view



The stock is still ~25% below pre-COVID-19 levels, weighed by concerns of

severe impact on General Staffing in the event of massive employee lay-offs.

However, we understand these concerns were exaggerated as the business /

cash collections did not witness any major dislocation over Mar–Jun'20. Lower-

than-expected headcount decline (~10% QoQ) and healthy cash conversion

(OCF/EBITDA = 80%) were impressive in the current context.

As the economy unlocks gradually and enterprises look to dodge supply

disruption, we believe the company/sector has already passed the peak of

uncertainty. Encouraging rebound in the unemployment situation (as reflected

in CMIE data) and the hiring outlook (as reflected in the recent TeamLease hiring

outlook survey) corroborate our view.

Given some level of uncertainty in the economy (due to the back and forth on

lockdowns), some of the otherwise permanent roles are also likely to be fulfilled

through flexi-staffing as employers attempt to keep their costs variable. We

noticed similar trends in the immediate aftermath of GFC and the

demonetization, when staffing companies benefitted due to positive hiring

trends in some verticals. Such a trend should likely play out in the near term,

benefitting staffing firms such as TeamLease.

Over the medium term, as both the central and state governments look forward

to liberalizing and formalizing the labor markets, TeamLease should be among

the biggest direct beneficiaries.

Stable realizations and aggressive cost rationalization should enable the

company to report robust margin expansion in FY21E.

Operationally, we keep our estimates largely stable. Our DCF-based TP of

INR2,700 implies 32x FY22E EPS. Reiterate

Buy.

2 August 2020

TeamLease

Financials and valuations

Income Statement

Y/E March

Total Income from Operations

Change (%)

Employee Benefit Expense

Other Expense

Total Expenditure

% of Sales

EBITDA

Margin (%)

Depreciation

EBIT

Int. and Finance Charges

Other Income

PBT bef. EO Exp.

PBT

Total Tax

Tax Rate (%)

Minority Interest

Reported PAT

Adjusted PAT

Change (%)

Margin (%)

FY15

20,071

31.2

19,445

385

19,830

98.8

240

1.2

213

114

326

5.5

308

73.2

1.5

FY16

25,049

24.8

24,391

400

24,791

99.0

258

1.0

228

154

378

130

34.4

248

-19.4

1.0

FY17

30,419

21.4

29,377

599

29,976

98.5

443

1.5

400

224

613

-50

-8.2

663

167.5

2.2

FY18

36,241

19.1

34,712

841

35,553

98.1

688

1.9

596

154

725

-9

-1.3

735

10.7

2.0

FY19

44,476

22.7

41,971

1,560

43,531

97.9

945

2.1

105

839

177

964

-16

-1.7

980

33.4

2.2

FY20

52,007

16.9

49,365

1,691

51,056

98.2

951

1.8

286

665

123

288

830

480

57.8

350

836

-14.7

1.6

FY21E

48,982

-5.8

46,859

910

47,769

97.5

1,213

2.5

328

885

101

208

992

0.5

987

18.1

2.0

(INR m)

FY22E

63,221

29.1

60,466

1,174

61,641

97.5

1,581

2.5

328

1,253

260

1,433

0.0

1,433

45.1

2.3

Balance Sheet

Y/E March

Equity Share Capital

Total Reserves

Net Worth

Total Loans

Capital Employed

Net Fixed Assets

Total Investments

Curr. Assets, Loans&Adv.

Inventory

Account Receivables

Cash and Bank Balance

Loans and Advances

Curr. Liability & Prov.

Other Current Liabilities

Provisions

Net Current Assets

Deferred Tax assets

Appl. of Funds

FY15

1,480

1,485

228

1,713

3,354

805

1,147

1,400

1,792

1,702

1,562

1,713

FY16

171

2,945

3,116

526

3,642

111

5,629

1,205

2,590

1,832

2,144

2,051

3,485

3,642

FY17

171

3,640

3,811

435

4,247

1,029

103

5,641

1,872

1,593

2,174

2,677

2,525

152

2,964

149

4,247

FY18

171

4,246

4,417

559

4,976

1,378

593

6,491

2,235

1,424

2,832

3,885

3,661

224

2,606

399

4,976

FY19

171

5,220

5,391

767

6,158

1,578

414

8,251

2,643

1,230

4,377

4,737

4,347

391

3,513

653

6,158

FY20

171

5,550

5,721

1,854

7,575

2,360

253

9,795

2,959

970

5,866

4,977

4,490

487

4,818

144

7,575

FY21E

171

6,537

6,708

1,280

7,988

1,361

253

11,411

3,087

2,976

5,346

5,182

4,948

234

6,229

144

7,988

(INR m)

FY22E

171

7,969

8,140

1,342

9,482

1,361

253

14,373

3,637

4,931

5,801

6,649

6,386

263

7,724

144

9,482

2 August 2020

TeamLease

Financials and valuations

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

BV/Share

DPS

Payout (%)

Valuation (x)

P/E

Cash P/E

P/BV

EV/Sales

EV/EBITDA

FCF per share

Return Ratios (%)

RoE

RoCE

RoIC

Working Capital Ratios

Asset Turnover (x)

Debtor (Days)

Leverage Ratio (x)

Current Ratio

Interest Cover Ratio

Net Debt/Equity

FY15

18.0

19.6

86.9

0.0

102.8

94.4

21.3

1.5

127.7

17.8

23.0

20.0

36.5

11.7

1.9

153.5

-0.6

FY16

14.5

16.3

182.2

0.0

127.5

113.7

10.2

1.2

114.7

-8.9

10.8

9.4

18.5

6.9

2.6

58.1

-0.7

FY17

38.8

41.3

222.9

0.0

47.7

44.8

8.3

1.0

68.8

18.3

19.2

17.1

24.0

7.2

2.1

36.5

-0.3

FY18

43.0

48.3

258.3

0.0

43.1

38.3

7.2

0.8

44.7

69.5

17.9

16.5

21.9

7.3

1.7

24.2

-0.3

FY19

57.3

63.5

315.3

0.0

32.3

29.1

5.9

0.7

33.0

11.5

20.0

18.6

22.8

7.2

1.7

16.1

-0.2

FY20

48.9

65.6

334.6

0.0

37.8

28.2

5.5

0.6

34.2

-25.0

15.0

5.8

5.2

6.9

2.0

5.4

0.1

FY21E

57.7

76.9

392.3

0.0

32.0

24.0

4.7

0.6

24.7

78.2

15.9

14.0

15.9

6.1

2.2

8.8

-0.3

FY22E

83.8

103.0

476.1

0.0

22.1

18.0

3.9

0.4

17.7

138.1

19.3

17.3

27.7

6.7

2.2

15.7

-0.5

Cash Flow Statement

Y/E March

OP/(Loss) before Tax

Depreciation

Interest & Finance Charges

Direct Taxes Paid

(Inc)/Dec in WC

CF from Operations

Others

CF from Operating incl EO

(Inc)/Dec in FA

Free Cash Flow

(Pur)/Sale of Investments

Others

CF from Investments

Issue of Shares

Inc/(Dec) in Debt

Interest Paid

CF from Fin. Activity

Inc/Dec of Cash

Opening Balance

Closing Balance

FY15

316

-65

343

-38

305

-186

-20

-244

-8

-1

-10

129

218

FY16

378

-99

-265

-150

-105

-47

-152

-1,192

-1,187

1,380

194

-4

1,569

277

218

496

FY17

613

-114

-191

-19

332

-18

314

-202

-169

-2

-399

-11

-412

-249

496

247

FY18

725

132

252

1,210

-22

1,188

-22

1,250

1,593

2,843

FY19

964

105

128

-927

287

-91

196

-91

230

1,424

1,654

FY20

830

286

186

-480

-1,134

-313

-115

-428

-115

656

229

1,230

1,459

FY21E

992

328

120

-5

1,456

-118

1,338

-118

1,338

970

2,308

(INR m)

FY22E

1,433

328

200

523

2,483

-122

2,362

-122

2,362

2,976

5,338

2 August 2020

TeamLease

Explanation of Investment Rating

Investment Rating

Expected return (over 12-month)

BUY

>=15%

SELL

< - 10%

NEUTRAL

< - 10 % to 15%

UNDER REVIEW

Rating may undergo a change

NOT RATED

We have forward looking estimates for the stock but we refrain from assigning recommendation

*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within

following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.

Disclosures

The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).

Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the

Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial

products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are

available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a

registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and

National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National

Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance

Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.

Details of associate entities of Motilal Oswal Financial Services Limited are

available on the website at

http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf

MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and

buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other

compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have

any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the

specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even

though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report

MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report

should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific

merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the

website at

https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx

A graph of daily closing prices of securities is available at

www.nseindia.com, www.bseindia.com.

Research Analyst views on Subject Company may vary based on Fundamental

research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated

from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.

Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability

or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.

For Hong Kong:

This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong

Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst

Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of

research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity

to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these

securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not

located in Hong Kong & are not conducting Research Analysis in Hong Kong.

For U.S.

Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under

applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers

Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any

brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is

intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as

"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which

this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration

provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange

Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-

dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this

chaperoning agreement.

The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.

registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public

appearances and trading securities held by a research analyst account.

For Singapore

In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets

services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and

Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL

in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,

of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the

SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and

inform MOCMSPL.

Specific Disclosures

1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.

2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company

3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months

4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report

5 Research Analyst has not served as director/officer/employee in the subject company

6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months

8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months

2 August 2020

TeamLease

9 MOFSL has not received any compensation or other benefits from third party in connection with the research report

10 MOFSL has not engaged in market making activity for the subject company

********************************************************************************************************************************

The associates of MOFSL may have:

financial interest in the subject company

actual/beneficial ownership of 1% or more securities in the subject company

received compensation/other benefits from the subject company in the past 12 months

other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on

the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL

even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.

acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the

company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)

received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.

The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report

Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not

consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from

clients which are not considered in above disclosures.

Analyst Certification

The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the

research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

Terms & Conditions:

This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and

may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent

of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in

nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,

representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The

report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial

instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as

customers by virtue of their receiving this report.

Disclaimer:

The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or

distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for

informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing

in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.

The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment

objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this

document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this

document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views

expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade

securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of

the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and

should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make

modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from

time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to

perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a

separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of

information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or

may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,

directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or

entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,

regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in

all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost

revenue or lost profits that may arise from or in connection with the use of the information.

The person accessing this information specifically agrees to exempt MOFSL or any of its

affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such

misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,

expenses that may be suffered by the person

accessing this information due to any errors and delays.

Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;

Website www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,

Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.

Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:

INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company

Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth

Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is

a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.

Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.

Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no

assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance

Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.

* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National

Company Law Tribunal, Mumbai Bench.

2 August 2020