Happiest Minds Technologies (NSE:(HAPPSTMNDS), a digital engineering and IT services firm, reported modest revenue growth in the third quarter of FY26, while adjusted profit improved despite one-time expenses linked to wage code implementation.
The company is focused on AI, cloud, analytics, IoT and cybersecurity-led transformation. It operates through three units, Product & Digital Engineering Services, Infrastructure Management & Security Services, and Generative AI Business Services, delivering consulting, engineering and managed services to global enterprises. Its services-driven model relies on offshore delivery and a mix of time-and-material and fixed-price contracts across sectors such as BFSI, healthcare, edtech and retail.
Q3 & 9M FY26 Financial Performance
- Revenue reached ₹58,756 lakh in Q3 FY26, rising 10.7% year-on-year and 2.4% sequentially, while total income stood at ₹60,328 lakh, up 8.9% annually.
- EBITDA came in at ₹12,283 lakh with a margin of 20.4%, reflecting steady operating performance.
- Operating profit increased to ₹10,087 lakh, with operating margin at 17.4%. Profit after tax declined 19.6% year-on-year to ₹4,030 lakh due to exceptional costs, including a one-time wage code expense. However, adjusted profit after tax rose 13% year-on-year to ₹6,992 lakh.
- For the first nine months of FY26, revenue reached ₹1,71,103 lakh, up 12.8% year-on-year, while adjusted PAT increased 6% to ₹20,728 lakh, highlighting continued operational resilience.
Segment Performance
- Product and Digital Engineering Services (PDES) remained the dominant business unit, contributing about 77% of revenue.
- Infrastructure Management and Security Services (IMSS) accounted for roughly 16%.
- Generative AI Business Services (GBS), a newer vertical, expanded its contribution to around 4% with strong growth momentum.
- From an industry perspective, BFSI contributed about 26% of revenue in Q3 FY26, followed by healthcare at nearly 19% and edtech at about 15%. Digital infrastructure and cloud services remained the largest technology offering at over 50% of revenue mix.
Business & Operations Update
- Happiest Minds continues to position itself as an AI-native enterprise, with over 75% of developers enabled for generative AI and a workforce that includes more than 600 AI specialists.
- The company reported multiple enterprise deployments across sectors including consumer goods, healthcare, education and manufacturing.
- Operational metrics showed utilization rising to 82%, while the active customer base increased to 297. The Americas remained the largest market, contributing close to 60% of revenue.
Other Major Highlights
During the quarter, the company reported growing adoption of generative AI solutions, with applications spanning automation, research assistance and digital transformation projects. It also continued to receive industry recognitions, including awards for AI in DevOps and workplace excellence.
Investor Sentiment & Outlook
- Margins remained stable and adjusted earnings growth suggests underlying profitability despite one-time expenses.
- The expansion of AI-led services and steady client additions indicate ongoing demand for digital transformation offerings.
Summary
Happiest Minds delivered steady revenue growth in Q3 FY26 and improved adjusted profitability, supported by strong demand in digital engineering and cloud services. While reported profit was impacted by exceptional costs, ongoing AI investments, diversified industry exposure and stable margins position the company for sustained growth momentum.