Motilal Oswal is bullish on TeamLease Services has recommended buy rating on the stock with a target price of Rs 3400 in its research report dated February 11, 2019.
Motilal Oswal's research report on TeamLease Services
TeamLease Services (TEAM) has announced the acquisition of eCentric Solutions’ IT staffing business, which has 880 associates and revenue of INR450m (as of FY18). The company will pay 4.5x PBT (~INR150-180m) or the acquisition through its subsidiary TL Digital by way of slump sale on a going-concern basis. The consideration will be payable in two tranches, on transfer of clients and transition support.
Outlook
We value TEAM using DCF to arrive at a TP of INR3,400 (implied target P/E of 3x/27x on FY20/21E EPS).
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