Happiest Minds Banks On Generative AI Expansion To Achieve Ebitda Margin Of 20-22% In FY26
Happiest Minds is aiming for a revenue target of $1 billion by FY31.
IT services firm Happiest Minds Technologies is targeting Ebitda margins of 20% to 22% in FY26, according to Managing Director Venkatraman Narayanan. The company is banking on investments in its generative AI business to achieve this goal.
“20 to 22%- that's the number we are targeting to achieve. Contributions from the generative AI business services and the new sales engine that we put in place in the last four to five quarters are now starting to bear dividends,” he said during a conversation with NDTV Profit on Wednesday.
The top executive highlighted the performance of the generative AI business in the first quarter of FY26.
“We have been making investments for the last five to six quarters. It has broken even on an operational basis this quarter. It's a small profit of Rs 24 lakh, but nevertheless, that shows the strength of the franchise and the focus that we are having in that business,” Narayanan added.
He noted that this was a turning point, as many proof-of-concept projects are now converting into long-term, revenue-generating contracts.
Happiest Minds Technologies remains committed to its ambitious vision of achieving $1 billion in revenue by FY31.
“We are constantly looking at the ways and means to achieve it organically and inorganically, as the case may be. We have got another five years out there for us to do,” he said.
Achieving the target would require a compound annual growth rate (CAGR) of 22-23%. He pointed to the company’s strong performance of 28.5% CAGR in constant currency since FY21.
Narayanan also highlighted that the $1 billion target is one of ten key objectives outlined in the company’s vision statement, with progress being made across multiple fronts.
The company reported a 12% year-on-year (YoY) increase in consolidated profit after tax to Rs 57.13 crore in Q1FY26 from Rs 51.03 crore in Q1FY25. Its Ebitda margin stood at 21.4% in Q1FY26 against 23.9% in Q1FY25. Revenue from operations rose 18.6% YoY to Rs 549.9 crore in Q1FY26 from Rs 463.82 crore in the year-ago quarter.
Shares of Happiest Minds Technologies were trading 0.54% higher at Rs 622.7 apiece on the NSE at 10:55 a.m., while the benchmark Nifty50 stood flat at 24,820.65.
