Happiest Minds - Higher For Longer: HDFC Securities Initiates Coverage With An 'Add' Rating

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..HDFC Securities Institutional Equities.We estimate Happiest Minds Technologies Ltd. will grow its revenue and earnings per share at 21% compound annual growth rate and 24% CAGR respectively over FY24-26E, which is in line with the mid-tier average (ranging from 9% to 27% EPS CAGR) over the same period. Happiest Minds’ valuation is higher than peers average with price-to-earning growth at 1.8 times as compared to peers at 1.5 times which is factoring in ‘higher for longer’ revenue growth. Based on reverse-discounted cash flow at current market price, the implied USD revenue growth for the company over FY23-38E is 16.5%. Happiest Minds’ valuation premium to the NIFTY IT index is at the lowest level and its valuation premium to larger high-growth peers (Persistent Systems Ltd., Globant, and Endava) has also converged. .We initiate coverage on Happiest Minds with an 'Add' recommendation for target price of Rs 935, based on 38 times FY26E EPS. Our DCF assumptions factor USD revenue growth at 16.6% CAGR over FY23-38E, weighted average cost of capital at 12%, terminal WACC at 11%, and terminal growth at 5.5%. Faster recovery in discretionary spending in the sector and value accretive acquisition ahead can be positive triggers for the stock which currently trades at 42 times and 34 times FY25E and FY26E (valuation multiples are down more than 15% from 48 times at the beginning of the year)..Click on the attachment to read the full report:.Varun Beverages- Strong Financial Position, Expansion To Drive Growth: KRChoksey Initiates Coverage With A Buy.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Happiest Minds - Higher For Longer: HDFC Securities Initiates Coverage With An 'Add' Rating

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