For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

Motilal Oswal Sees A 51% Upside On This Stock

|

Broking firm Motilal Oswal sees an upside potential of 51 per cent in the stock of Teamlease Services Ltd and believes there is a strong case for margin expansion. The stock currently trades at Rs 1718 and the broking firm has a target of Rs 2,600, implying an upside of 51 per cent from the current levels.

Valuation and view - Uncertainty declines meaningfully!

"As the economy prepares for a phased re-opening and given that clients have already incurred the bench cost of associates for the previous two months, it is unlikely that Teamlease Services would see a sharp spike in demobilization requests (May-Jul'20).

Motilal Oswal Sees A 51% Upside On This Stock
 

The propensity of enterprises to dodge supply-side disruption risk would be another key tailwind - (a) an increase in the pipeline of open positions in some verticals (NBFCs/Cards and Ecommerce), and (b) a rise in sales, logistics, collection agents, and customer service role requirements in a post-lockdown economy, which should drive resilience," the broking firm has stated.

Motilal Oswal believes that the current situation should also drive the conversion of certain otherwise strictly permanent roles to flexi roles.

"Significant pull-back in urban unemployment rate over the previous week (17% v/s 25% during lockdown; Source - CMIE) gives us further comfort. As the government looks forward to liberalizing and formalizing the labor markets, TEAM should be among the biggest direct beneficiaries. We upgrade our EPS estimate for FY21-22E by 15%, given the positive commentary around (a) recovery, and (b) EBIT margin expansion. Our DCF based target price of Rs 2,600 implies 32x FY22E EPS. Reiterate Buy," the broking firm has stated.

Read more about: stock
Story first published: Thursday, June 11, 2020, 11:48 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more