Happiest Minds Tech Q4 FY24: profit grows 25%, revenue Up 10%

IT firm Happiest Minds Technologies reported a 24.83% increase in consolidated net profits at ₹71.98 crore for the quarter ended March 2024. The Bengaluru-based firm expects to capitalise on its newly launched Gen AI business unit. According to a stock exchange filing, the company clocked a profit of ₹57.66 crore in the year-ago period.

Revenue from operations for the reporting quarter stood at ₹417.29 crore, as against ₹377.98 crore in Q4FY23, translating into a 10.4% rise. The rise was led by the edutech vertical (22.3%), followed by healthcare (16.1%).

Executive chairman Ashok Soota said the newly created Gen AI business unit, the creation of six new industry groups, and the successful closure of two acquisitions have put the company back on course towards accomplishing its long-term vision of $1 billion in revenues by FY31. Annual profits saw a 7.53% rise to ₹248.39 crore, compared to the previous fiscal's ₹230.99 crore.

Read more: Happiest Minds acquires Noida-based PureSoftware Technologies for ₹779 crore

Revenue for the financial year 2023-24 was at ₹1,624.66 crore, a 13.66% climb over FY23's ₹1,429.29 crore.

"Happy to report full-year revenue growth in constant currency of 11% and EBITDA of 24.6%. I am proud of our performance, especially in the face of a challenging year faced by our industry," MD and CFO Venkatraman Narayanan said. He gave an estimated growth guidance of 35-40% for FY25. 

Last month, it signed a definitive agreement to acquire Noida-based PureSoftware Technologies for a total purchase consideration of $94.5 million (about ₹779 crore). With this acquisition, Happiest Minds aims to strengthen its domain capabilities in banking, financial services & insurance (BFSI), healthcare and life sciences verticals. The acquisition is expected to be completed before May 31, 2024. In addition to augmenting its presence in the US, the UK, and India, Happiest Minds will also gain a near-shore presence in Mexico and offices in Singapore, Malaysia, and Africa.

The company's headcount as of March 31, 2024, was 5,168, with an attrition rate of 13%.  Joseph Anantharaju, executive vice chairman, said that for FY24, part of our headcount has come from the campus batch. Our latest batch is ready for deployment. "For fresher hiring, we are being agile in our approach to 'going back to campus'. We will take a call around August. Given the nature of the digital space, there is a wide range of technologies, and based on the demand, we do need to go and bring people on board," he said.

Anantharaju further said the company's deal pipeline continues to be strong, "there was a dip in Q3 but Q4 was reflective of the changes that we made. Our efforts around GenAI are paying off." 

In October last year, the company established a new business unit, Generative AI Business Services (GBS). Soota said the foray into Gen AI is a transformational opportunity for the company and that FY25 is poised to be the company's best year since its IPO. 

“This year, we are back on track to achieve our long-term vision of $1 billion in revenues by FY31. We required a 25.3 per cent Compound Annual Growth Rate (CAGR) when we announced this goal in September 2021, but now we envision that we will need only a CAGR of 22 per cent to achieve this goal,” Soota said in a post-earnings media call.

The company recommended a final dividend of ₹3.25 per equity share of ₹2 each for the financial year ended March 31, 2024, subject to shareholders' approval.