Happiest Minds on track to meet 25% revenue growth for FY23
According to Venkatraman Narayanan, MD & CFO of Happiest Minds Technologies, the December quarter was impacted by a number of one-off factors. Despite this, the company's constant currenc revenue growth came in at 2.8 percent, which is a slight decrease from the 5 percent growth seen in previous quarters. Despite the challenges faced in Q3, Happiest Minds Technologies expects to remain on track to meet its goal of 25 percent revenue growth for the full fiscal year of 2023
Happiest Minds Technologies posted a weak operating performance for the quarter ended December. It also recorded a 3.1 percent sequential decline in profit at Rs 57.6 crore, impacted largely due to exceptional loss related to the fair valuation of Happiest Minds Inc, acquired in January 2021. However, it was supported by other higher income.
According to Venkatraman Narayanan, the MD & CFO of the company, the quarter was impacted by a number of one-off factors. Despite this, the company's constant currency (CC) revenue growth came in at 2.8 percent which is a slight decrease from the 5 percent growth seen in previous quarters. Despite the challenges faced in Q3, Happiest Minds Technologies remains on track to meet their goal of 25 percent revenue growth for the full fiscal year of 2023.
The operating performance was weak for the quarter, as EBIT (earnings before interest and tax) fell 1.6 percent quarter-on-quarter to Rs 79.5 crore and the margin dropped 1 percentage point to 21.7 percent, partly hit by employee and finance costs. “The reason for that has been we had lesser number of billing day, and also there has been an increase in the holidays taken by people," Narayanan told CNBC-TV18.
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“But the larger picture is, YTD nine months, we have done 26 percent growth year-over-year and on the profit front, we are at 26 percent compared to the guidance of 22 to 24 percent. So both, on the revenue front and the profit front, we are ahead of the margins that we had guided for the year,” he added.
Happiest Minds reported 20.9 percent attrition in the third quarter. Joseph Anantharaju, the executive VC & CEO-Pdt Engineering Services at Happiest Minds, reported that attrition in the third quarter had fallen by 3-4 percent. He also expressed confidence that the company may even beat its revenue guidance for the fiscal year 2023, which stands at 25 percent.
“We are seeing the market becoming a little bit more balanced now between demand and supply. Given the initial trends that we are seeing in terms of resignations in December, and November, and early part of January, I think this number will continue dropping, and over a couple of quarters, we should get back to our historical numbers of between 13 to 16 and 17 percent attrition, and that will also help a little bit from an operational perspective,” he said.
Narayanan added that despite re-classification, furloughs and the holidays, which was kind of unplanned for in the third quarter, "we hope to do cover that up in quarter four and also meet the numbers of 25 percent for the year.”
Consolidated revenue from operations for the quarter at Rs 366.9 crore was up 3.2 percent over the previous quarter. The growth in revenue in dollar terms stood at 2.1 percent on a sequential basis, with constant currency growth at 2.8 percent for the quarter ended December FY23.
Happiest Minds increased its active clients to 230 at the end of December FY23, up from 226 clients as of December FY23.
The stock ended 2 percent lower on the NSE at Rs 849.5 apiece.
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