Why is Team Lease Services Ltd falling/rising?

Recent Price Movements and Market Performance

Team Lease Services Ltd’s stock has been under pressure over the past week and month, with returns of -4.99% and -9.08% respectively, significantly underperforming the broader Sensex benchmark, which recorded declines of just -1.14% and -1.20% over the same periods. Year-to-date, the stock has fallen by 13.29%, compared to a more modest 3.04% drop in the Sensex. The longer-term trend is even more stark, with the stock delivering a negative 35.50% return over the past year, while the Sensex gained 8.52%. Over three and five years, the divergence widens further, with Team Lease Services Ltd down 45.28% and 58.00% respectively, contrasting with Sensex gains of 36.73% and 60.30%.

On 13-Feb, the stock hit an intraday low of Rs 1,350, marking a new 52-week low. The weighted average price indicated that more volume was traded near this low, signalling selling pressure. Additionally, the stock has been trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — which typically suggests a bearish technical outlook. The stock has also recorded a consecutive two-day decline, losing 5.78% in that period, further underscoring the negative momentum.

Investor participation appears to be waning, with delivery volumes on 12 Feb falling sharply by 57.03% compared to the five-day average. This decline in investor engagement may reflect caution or uncertainty among shareholders, contributing to the stock’s downward trajectory. Despite this, liquidity remains adequate for moderate trade sizes, with the stock’s traded value supporting transactions up to Rs 0.07 crore based on 2% of the five-day average traded value.

Fundamental Strengths Amidst Market Weakness

Despite the recent price weakness, Team Lease Services Ltd exhibits several positive fundamental attributes. The company maintains a low average debt-to-equity ratio of zero, indicating a conservative capital structure and limited financial risk. Operationally, the December 2025 half-year results showed a robust debtors turnover ratio of 23.64 times, signalling efficient receivables management.

Profitability metrics also reflect strength. The company’s profit before tax excluding other income (PBT less OI) for the quarter stood at Rs 25.36 crore, representing a growth of 38.28%. Net profit after tax (PAT) reached a record Rs 47.28 crore for the quarter, underscoring improving earnings quality. Return on equity (ROE) is a respectable 12.2%, and the stock trades at a price-to-book value of 2.4, which is considered fair relative to its peers’ historical valuations.

Interestingly, while the stock price has declined by 35.50% over the past year, the company’s profits have increased by 34.6%, resulting in a low PEG ratio of 0.5. This suggests that the stock may be undervalued on a growth-adjusted basis, although market sentiment has not yet reflected this potential.

Institutional investors hold a significant 56.19% stake in the company, indicating confidence from knowledgeable market participants who typically have greater resources to analyse fundamentals. This institutional backing may provide some stability amid the recent volatility.

Conclusion: Market Sentiment and Technical Weakness Drive Recent Decline

The recent decline in Team Lease Services Ltd’s share price appears primarily driven by technical weakness and subdued investor participation rather than fundamental deterioration. The stock’s underperformance relative to the Sensex and sector peers, combined with its trading below all major moving averages and hitting a new 52-week low, reflects cautious market sentiment. Reduced delivery volumes suggest investors are hesitant to accumulate shares at current levels.

Nonetheless, the company’s solid financial metrics, including strong profit growth, efficient working capital management, and a conservative balance sheet, provide a foundation for potential recovery. The disconnect between rising profits and falling share price may present an opportunity for investors who prioritise fundamentals and long-term value. However, near-term price action will likely remain influenced by broader market trends and technical factors until investor confidence improves.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →