Union Budget 2024: TeamLease Services share price surges 10% on employment schemes announced by FM Sitharaman

Union Budget 2024: TeamLease Services share price shot up about 10% on Tuesday after Finance Minister (FM) Nirmala Sitharaman said that the government will allocate ₹2 lakh crore for job creation over the next five years. TeamLease Services share price opened at an intraday low of ₹2,830 apiece on BSE, the stock touched an intaday high of ₹3,184.50.

“We are seeing volume activity and prices breaking beyond the last couple of weeks trading range. A closing above ₹3,100 can push prices towards ₹3,500 in the near term,” said Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One.

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TeamLease provides a wide range of HR services to its clients, including staffing, temporary and permanent recruitment, payroll process outsourcing, regulatory compliance services, vocational training/education, and assessments.

TeamLease Services reported a 14.8% increase in fourth-quarter earnings (Q4FY24), driven by growth in its general staffing sector.

The firm reported a total net profit of ₹27.48 crore for the three months ending March 31. Total income increased by 20% to ₹2,432 crore rupees, with the company’s general staffing sector accounting for nearly 92% of the total, up 21.

During the presentation of the Union Budget, Finance Minister Nirmala Sitharaman announced three employment-linked incentive packages.

Scheme A provides first-time EPFO employees with a Direct Benefit Transfer of one month’s salary in three installments of up to ₹15,000.

To boost employment, it would implement incentives for businesses, notably those in the manufacturing sector, as well as programs to develop skills and give subsidised loans for higher education, Sitharaman said.

According to Reuters report, India’s official urban unemployment rate is 6.7%, while the private firm Centre For Monitoring Indian Economy estimates it to be 8.4%.

The government has put forward a new centrally funded plan to skill 20 lakh youth over the next five years. The minister stated that the model skilling loan plan will be updated to provide loans up to ₹7.5 lakh.

As part of the skilling initiative, 1,000 ITIs will be updated using the hub-and-spoke concept. Furthermore, the government would offer financial assistance for loans up to ₹10 lakh for higher education at domestic institutions.

Sitharaman stated that the new government funded skilling initiative, developed in partnership with states and industry, will train 20 lakh young adults over a five-year period.

Further, Sitharaman announced the launch of an initiative in which 500 major companies will offer internships to one crore students over the next five years. The Finance Minister also stated that corporations would be obliged to earn the training cost and 10% of the internship cost from their CSR money. The internship allowance will be ₹5000 per month, with a one-time help of ₹6000 offered.

As per Business Insider news report, Ramesh Alluri Reddy, CEO at TeamLease Degree Apprenticeship, said “significant investment in skill development programs and the incentivization of industries to adopt comprehensive apprenticeships lays a solid foundation for a future-ready workforce. Integrating on-the-job training (OJT) as a mandated component of degrees, in collaboration with industry partners, allows students to gain invaluable practical experience, even if the training is not necessarily on-site.”

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