Happiest Minds Q1 Results: GenAI, strategic acquisitions drive IT firm's growth

Happiest Minds Technologies, an Indian mid-sized IT services firm, announced its Q1 2025 results on Monday, revealing that its Generative AI Business Services (GBS) unit contributed ₹7.13 crore to the revenue for the quarter ending 30 June.

In comparison to the preceding quarter, revenue experienced an increase of 11.15%, whereas profit encountered a significant decrease of 29.11%. This suggests that Happiest Minds Technologies faced difficulties in profitability during this quarter, despite the favourable revenue trends.

Ashok Soota, Executive Chairman of Happiest Minds Technologies, however, was optimistic about the company's long-term goal of achieving $1 billion in revenue by FY31, relying on the new generative AI business unit and the success of its acquisitions.

“The establishment of our GenAI business services, the reorganisation of business units into profit centres, and two strategic acquisitions have positioned us for accelerated growth, which we expect to see in upcoming quarters,” said Soota.

In January, the company announced its strategy to verticalise its operations into industry groups to broaden its client base while investing in artificial intelligence (AI) capabilities, particularly targeting the Indian market. Last month, it introduced an AI-driven IT Managed Service offering, named Happiest Minds’ WATCH360, aimed at enhancing enterprise IT management.

In May, Happiest Minds acquired a 100% stake in US-based digital product engineering firm Aureus Tech Systems for $8.5 million (approximately ₹71 crore). In April, it purchased PureSoftware Technologies for $94.5 million (₹784 crore) and Macmillan Learning India for ₹4.5 crore.

Aureus specializes in digital transformation through data, AI, and application modernisation, while the acquisition of PureSoftware aims to enhance Happiest Minds' capabilities in critical sectors such as Banking, Financial Services, Insurance (BFSI), and Healthcare and Life Sciences.

As of June 30, Happiest Minds reported a workforce of 6,599 employees, an increase from 5,168 in the preceding quarter. The attrition rate experienced a slight rise to 13.5%, up from 13%, while utilisation rates improved to 78%, compared to 75% in the previous quarter. 

Regarding the company's profit, there was a decrease of 29% from the last quarter and 12.5% year-on-year (YoY). The company attributed this decline to non-recurring expenses incurred during this quarter, contrasting with a significant exceptional write-back in the previous period, as well as heightened amortisation and financing costs associated with recent acquisitions.