TeamLease Services Limited has filed a writ petition with the Hon'ble High Court of Karnataka challenging an Order-in-Appeal dated January 30, 2026, from the Commissioner of CGST & Central Excise (Appeals-III), Mumbai. The order upheld a penalty of approximately ₹32.29 crore but did not raise any tax demand, resulting in no material impact on operations at this stage. The penalty arises from allegations regarding the issuance of invoices without an underlying supply of services for manpower services rendered between July 2017 and July 2022.

The company contends that it duly rendered the manpower services, issued valid GST invoices, processed payments of salaries with applicable statutory deductions, and discharged the requisite GST. TeamLease asserts that all transactions were reported in statutory returns and reflected in financial statements. The company argues that the impugned order suffers from jurisdictional and legal infirmities, including a violation of the principles of natural justice and the summary disposal of multiple appeals through a common order.

Legal Proceedings and Financial Implications

The authorities imposed the penalty under Section 122(1)(ii) read with Section 74 of the CGST Act, 2017, following an investigation by the Directorate General of GST Intelligence. TeamLease stated that a similar case re-opened under Section 147 of the Income Tax Act, 1961, for the period FY2019 to FY2022 was closed with NIL observations after the Income Tax Department verified the records.

The matter has been disclosed as a contingent liability under Note 46(f) in the standalone financial statements for FY25. The company is seeking appropriate interim relief, including a stay against recovery proceedings, through the writ petition. TeamLease remains committed to ensuring full compliance with applicable laws and regulatory requirements and will inform the stock exchanges of material developments.

TeamLease Services reported a Profit After Tax (PAT) of ₹147.1 crore for FY26, marking a 33% increase from ₹110.5 crore in the previous year. For the fourth quarter (Q4FY26), PAT stood at ₹46.0 crore. The company achieved a total revenue of ₹11,859 crore for FY26, a 6% year-on-year growth compared to ₹11,201 crore in FY25. EBITDA for the full year rose 14% to ₹158.0 crore, with an EBITDA margin of 1.34%. Profit Before Tax (PBT) grew 36% to ₹155.9 crore.

Financial Performance

The table below summarizes the key financial metrics for the quarter and financial year ended March 31, 2026:

Operational Highlights

TeamLease reported a headcount of 3,40,600 for FY26, a decrease of 2% from the previous year. The company added 109 new enterprise client logos during Q4FY26. Net free cash stood at ₹600 crore, aided by an income tax refund of ₹143.1 crore. Specialized Staffing delivered strong growth, with gross revenue increasing 13% YoY. EBITDA grew 8% QoQ in Q4FY26, with margins expanding 15 bps over Q3FY26.

Share Buyback and Postal Ballot

The board approved a proposal to buy back up to 14,87,500 fully paid-up equity shares, representing 8.87% of the total paid-up capital. The buyback price is fixed at ₹1,600 per share, aggregating to ₹238 crore. The offer represents a premium of 15.37% and 15.58% over the closing prices on the NSE and BSE as of May 8, 2026. The buyback will be conducted via the tender offer route and is subject to shareholder approval. Nuvama Wealth Management Limited has been appointed as the Manager to the Buyback.

The company has dispatched the Postal Ballot Notice to shareholders on May 29, 2026, seeking approval for the buyback and the re-appointment of three Independent Directors: Mr. Mekin Maheshwari, Ms. Meenakshi Nevatia, and Mr. Subramaniam Somasundaram. The remote e-voting period commences on May 30, 2026, and ends on June 28, 2026. The results of the Postal Ballot will be announced on or before June 30, 2026. KFin Technologies Limited has been engaged to facilitate the e-voting process.