Happiest Minds Technologies Ltd. aims 20% operating revenue growth for the upcoming financial year as businesses continue to move online amid the coronavirus pandemic.
“People have realised that the old way of doing business was anyway not suitable in the pre- and post-pandemic world and so the demand has now accelerated and all tech companies are reaching out for a quick migration,” Venkatraman Narayanan, managing director and chief executive officer at the IT services provider, told BloombergQuint’s Niraj Shah in an interview. “Looking a little forward, we always said that we would do twice the industry growth rate, which right now is expected to be 9-10%.”
The Ashok Soota-founded company reported an operating revenue growth of 9.6% for the first nine months in the ongoing financial year and (Ebitda) margin of 27.3% and 29.3% for the nine and three months ended December.
That, according to Narayanan, was aided by drastic reduction in travel expenses, rent and electricity. Besides, a very high utilisation rate of 81.6% and a low attrition rate of 13.1% have boosted the operating performance. The company, he said, has not faced any pricing pressure despite the pandemic. Happiest Minds now targets a margin of 21-24% for the next few years.
Recently, Nomura initiated coverage on Happiest Minds with a ‘buy’ rating, triggering a rally in the stock. The research firm also expects the IT company’s U.S. dollar revenue to grow at an annualised rate of about 25% over FY21-24.
“January has been a busy month for sales, pre-sales and delivery,” Executive Vice Chairman Joseph Anantharaju, who also joined Narayanan in the conversation with BloombergQuint, said. “With demand returning and growing since January 2021, projects in sectors like edutech, hi-tech, media and entertainment, and BFSI kick-started immediately, while a lot of work is also expected to start off in the industrial and retail sectors despite heavy Covid effects. The demand further received an impetus due to increased work from home policy adopted by most companies.”
According to Narayanan, future investments of Happiest Minds will focus on building greater capability in domain areas, accelerating internal process capability in terms of expertise and newer technologies like blockchain. The company also intends to develop more consultative capabilities to be able to serve their customers better.