Happiest Minds Q4 Results: Revenue Rises Nearly 3%, Profit Flat

Happiest Minds Technologies Ltd. clocked tepid growth in the March quarter even as profit remained flat and missed estimates.

Revenue of the Ashok Soota-led IT services firm rose 2.94% over the previous three months to Rs 377.98 crore in the quarter ended March 31, according to an exchange filing on Monday. That compares with the Rs 373 crore consensus estimate of analysts tracked by Bloomberg.

Happiest Minds Q4 Results FY23: Key Highlights (QoQ)

• Revenue up 2.94% at Rs 377.98 crore (Estimate: Rs 373 crore)

• EBIT flat at Rs 79.23 crore versus Rs 79.54 crore in Q3

• EBIT margin at 20.96% as compared with 21.68% in Q3

• Net profit up 0.13% at Rs 57.66 crore (Estimate: Rs 61.25 crore)

For the full fiscal, Happiest Minds clocked revenue growth of 23.7% in constant currency terms, even as profit grew 27.5% over the year ago period to Rs 230.99 crore. The company's operational profitability—or earnings before income and tax—improved 28.9% year-on-year to Rs 379.97 crore in FY23.

“We have missed our revenue growth target by 1.3% due to the right-shifting of some Q4 revenues. This has been more than compensated by delivering an Ebitda, which exceeded the upper band of our guidance of 22-24%,” Ashok Soota, executive chairman at Happiest Minds, said in a statement accompanying the earnings. “In view of our strong business pipeline, we are planning a record people addition of 1,300. Accordingly, we are retaining our FY24 revenue guidance growth at 25%.”

This is the 12th consecutive quarter when Happiest Minds has clocked an EBIT growth of more than 25%, Chief Financial Officer Venkatraman Narayanan said in the statement.

Happiest Minds struck 16 new deals in the March quarter, including those from an edtech firm as well as a global auto company headquartered in India. As on March 31, the company had 237 clients.

“We saw a marked improvement in pipeline and deal velocity in the second half of the quarter setting us up well for the first quarter and FY24,” Executive Vice Chairman Joseph Anantharaju said in the statement.

In the January-March quarter, Happiest Minds added a net 306 employees, increasing its total headcount to 4,917. The attrition rate, on a trailing 12-month basis, stood at 19.8%, even as utilisation levels fell to 74.6% from 80.1% in the October-December period.

The Bengaluru-based company has declared a dividend of Rs 3.40/share. The stock, however, fell the most in three weeks after the quarterly results were announced. It ended the day 1.75% lower at Rs 855.70 apiece even as the benchmark Sensex rose 1.16% to 61,764.25 points.