Happiest Minds On Track To Meet 25% Revenue Growth

Happiest Minds Technologies Ltd. recorded a 3.1% sequential decline in profit at Rs 57.6 crore, but it has been able to meet revenue guidance.

The decline in profit was largely due to the exceptional loss related to the fair valuation of Happiest Minds Inc., which was acquired in January 2021. However, it was supported by other higher income.

It reported year-to-date revenue growth in constant currency of 26% and Ebitda of 26.3%, well above guidance.

"Would have liked to achieve better revenue growth in Q3 on (a) sequential basis. However, December quarter was impacted by one-off factors," said Venkatraman Narayanan, the managing director and chief financial officer of Happiest Minds Technologies.

Narayanan said the company had been able to meet revenue guidance and beat margins from a nine-month perspective.

It is reasonably confident of meeting the margin guidance of the financial year 2022-23 after taking current market conditions into consideration.

Its utlisation level is ahead of their own estimates. However, the next quarter management is expected to see a drop in utilisation due to the campus recruitment programme. The objective is to get the new recruits billable over the next seven-nine months as talent on digital front is scarce and difficult to find.

The firm posted a trailing 12-month attrition of 20.9% in the December quarter and the management expects attrition to trend lower and go down to 13-15% in the near term.

On the demand front, it has added nine clients in the quarter. "Customers are prioritising their initiatives that would give them strategic benefits or quick returns," Executive Vice Chairperson Joseph Anantharaju said. "There is demand in the market, its only about priority."

Anantharaju added that historically, the third quarter is slow and deals that did not close in December would fructify in January.

Existing businesses are contributing 90–92% in terms of revenues on a quarterly basis and that trend is expected to continue. Account mining and expansion is of key focus for the company.

Narayanan added that 22-24% is the sustainable margin range for the current fiscal.

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