Happiest Minds: A Next Generation Mindful IT Company

“Looking to the year ahead, we continue to see strong demand. We have positioned ourselves better to fulfil this demand by enhancing our delivery capacity in every location. Our traditional areas of strength, such as Edutech, hi-tech and retail continue to show sustained growth. We are increasing our presence in health care and BFSI with a view to sustain our industry-leading growth rate.”
-Ashok Soota, Executive Chairman

Stock Data

Ticker	HAPPSTMNDS
Exchange	NSE & BSE
Industry	IT

Share Price

Last 1 Month	-2.4%
Last 6 Months	-18.5%
Last 12 Months	-25.7%

Business Basics

Happiest Minds is a digital transformation and IT consulting company that provides services across several industries such as healthcare, banking, finance, and insurance. Happiest Minds’ service offerings include digital transformation, cloud computing, cybersecurity, analytics, and artificial intelligence. The company helps its clients to improve their business processes, enhance customer experience, and increase operational efficiency through the implementation of digital technologies. It has a diversified customer base, with clients ranging from small and medium-sized enterprises (SMEs) to large multinational corporations.

The company has a significant presence in the US, Europe, and India and has been expanding its operations in other regions such as the Middle East and Asia Pacific. The company’s revenue model is based on a combination of fixed-price contracts, time and materials contracts, and managed services contracts. Happiest Minds has a strong focus on innovation and R&D and has several patented solutions in areas such as cybersecurity and artificial intelligence. Happiest Minds’ success in the digital transformation and IT consulting industry is driven by its focus on customer-centricity, innovation, and agility. With a growing market and increasing demand for digital transformation services, Happiest Minds is well-positioned to continue its success in the future.

Company’s Business Segments

Happiest Minds has three main business segments: Infrastructure Management and Security Services (IMSS), Digital Business Services (DBS), and Product Engineering Services (PES).

The IMSS segment provides infrastructure management services, cloud management services, and security services to its clients. The company’s infrastructure management services include network management, server management, and application management. The security services include identity and access management, vulnerability management, and threat management.

The DBS segment provides digital transformation services to clients across various industries such as healthcare, banking, finance, and insurance. The company’s service offerings in this segment include digital consulting, digital marketing, digital commerce, and digital analytics.

The PES segment provides product engineering and software development services to clients across various industries. The company’s service offerings in this segment include software product development, software testing, and product sustenance services.

Q3 FY23 Financial Performance

Happiest Minds Limited reported Revenue from Operations for Q3 FY23 of ₹366.88 Crore up from ₹283.94 Crore year on year, a growth of 29.2%. The Revenue was driven by Product Engineering Services segment which surged by 29% up to ₹175.11 Crore. Consolidated Net Profit of ₹57.58 Crore, up 17.7% from ₹48.92 Crore in the same quarter of the previous year. The Earnings per Share is ₹3.98 for this quarter.

Recent Developments In The Company

A net addition of 30 employees for the quarter and 443 for the nine-month period brought the company’s total workforce to 4,611 at the end of the quarter. Happiest Minds’ attrition rates are on the decline and are currently at around 20.9%, down from 23.5% in the previous quarter. At the end of the quarter, the ratios for diversity and inclusion were 27.7%. On the business front, all industries and regions are doing well. The loss of billing days, however, resulted in a small decline in the company’s BFSI share. According to management, this quarter had one fewer working day than the previous quarter.

At the end of the quarter, Happiest Minds had 230 active clients, 40 of whom had annual revenue of $1 million or more, 92% repeat business, and an average of $792k in revenue per client. Additionally, customers with whom the business has had a relationship for more than five years account for 50% of the company’s revenues.

Analysis Of India’s IT Industry

Information technology services and business process outsourcing are both included in India’s IT sector. This sector has become one of India’s most significant economic engines. The IT sector contributed 7.4% of India’s GDP in FY22, and by 2025, it is expected to account for 10% of India’s GDP. In FY22, the Indian IT sector’s revenue reached $ 227 billion, an increase of 15.5% year over year. Additionally, it is predicted that export revenue will reach $181 billion in FY 2022.

According to different research, the Indian IT sector will reach $350 billion by 2025. Such expansion is due to the necessity of digitization and the businesses’ supportive attitude towards it. It is anticipated that the IT sector will continue to play a significant role in boosting employment and creating job opportunities for Indian youth.
To advance the IT and ITeS industry in India, the Indian government has launched a number of initiatives. Creating Software Technology Parks (STP), Export Oriented Units (EOU), Special Economic Zones (SEZ), and allowing foreign direct investment (FDI) are a few of these initiatives. Additionally, the government has increased funding for Digital India to advance robotics, AI, IoT, big data, cybersecurity, and machine learning.