Current Rating and Its Significance
The 'Hold' rating assigned to Team Lease Services Ltd indicates a neutral stance for investors. It suggests that while the stock does not present a compelling buy opportunity at present, it is not advisable to sell either. This rating reflects a balance between the company’s strengths and challenges, signalling that investors should monitor the stock closely and consider holding existing positions rather than initiating new ones or exiting prematurely.
Quality Assessment
As of 17 February 2026, Team Lease Services Ltd demonstrates a solid quality grade, classified as 'good' by MarketsMOJO. The company maintains a notably low debt-to-equity ratio, averaging zero, which underscores a conservative capital structure and limited financial risk. This prudent approach to leverage enhances the company’s resilience amid market fluctuations.
Moreover, the company’s operational efficiency is evident in its debtors turnover ratio, which reached a high of 23.64 times in the half-year period ending December 2025. This metric indicates effective management of receivables and strong cash flow generation capabilities. Profitability metrics also reinforce quality, with the company reporting a quarterly profit before tax (PBT) of ₹25.36 crores, reflecting a robust growth rate of 38.28%, and a record quarterly profit after tax (PAT) of ₹47.28 crores.
Valuation Perspective
Team Lease Services Ltd’s valuation is currently considered attractive. The stock trades at a price-to-book (P/B) ratio of 2.3, which is reasonable relative to its sector peers and historical averages. This valuation level suggests that the market is pricing the company fairly, neither excessively discounting nor overvaluing its shares.
Additionally, the company’s return on equity (ROE) stands at 12.2%, signalling efficient utilisation of shareholder capital to generate profits. The price/earnings to growth (PEG) ratio is a modest 0.5, indicating that the stock’s price growth is favourable relative to its earnings growth, which has increased by 34.6% over the past year. Despite the stock’s negative price returns, this valuation metric highlights underlying earnings strength that may not yet be fully reflected in the share price.
Financial Trend Analysis
The financial trend for Team Lease Services Ltd is positive, supported by recent quarterly results and key performance indicators. The company’s earnings growth and operational metrics point to improving fundamentals. However, the stock’s price performance has been weak over the past year, with a 34.13% decline as of 17 February 2026. This underperformance contrasts with the company’s profit growth, suggesting a disconnect between market sentiment and financial results.
Institutional investors hold a significant 56.19% stake in the company, which often reflects confidence from sophisticated market participants who have the resources to analyse company fundamentals thoroughly. This institutional backing can provide stability and support for the stock in volatile market conditions.
Technical Outlook
From a technical perspective, the stock is currently rated as bearish. Recent price trends show a decline over multiple time frames: a 1-month loss of 10.45%, a 3-month drop of 19.29%, and a 6-month decrease of 20.13%. The year-to-date return is also negative at -12.43%. These trends indicate downward momentum and caution for short-term traders.
Despite the bearish technical signals, the 'Hold' rating reflects a balanced view that the stock’s fundamental strengths may eventually support a recovery. Investors should consider technical indicators alongside fundamental analysis when making decisions.
Performance Relative to Benchmarks
Team Lease Services Ltd has consistently underperformed the BSE500 benchmark over the last three years. This persistent underperformance, combined with negative returns in each of the last three annual periods, highlights challenges in market sentiment and price appreciation. Nonetheless, the company’s improving earnings and attractive valuation metrics suggest potential for future turnaround if market conditions improve.
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What This Rating Means for Investors
For investors, the 'Hold' rating on Team Lease Services Ltd suggests a cautious approach. The company’s strong fundamentals, including low leverage, improving profitability, and attractive valuation, provide a solid foundation. However, the bearish technical outlook and recent price underperformance warrant prudence.
Investors currently holding the stock may consider maintaining their positions while monitoring market developments and quarterly results closely. Prospective investors might wait for clearer signs of technical recovery or further fundamental improvements before initiating new positions.
Overall, the 'Hold' rating reflects a balanced assessment that the stock is fairly valued with potential upside tempered by near-term risks. It encourages a measured investment strategy aligned with individual risk tolerance and portfolio objectives.
Summary of Key Metrics as of 17 February 2026
- Mojo Score: 50.0 (Hold grade)
- Market Capitalisation: Smallcap
- Debt to Equity Ratio: 0 (average)
- ROE: 12.2%
- Price to Book Value: 2.3
- PEG Ratio: 0.5
- Quarterly PBT: ₹25.36 crores (growth of 38.28%)
- Quarterly PAT: ₹47.28 crores (highest recorded)
- Institutional Holdings: 56.19%
- 1-Year Stock Return: -34.13%
- Technical Grade: Bearish
Investors should weigh these factors carefully in the context of their investment horizon and risk appetite.
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