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Happiest Minds Quarterly Results Q2 FY22

14 March 2022

Happiest Minds revealed their quarterly numbers late on Wednesday night (27 Oct 2021). The company’s revenues climbed to Rs 264.5 crores registering a 44.7% year on year (YoY) growth. With an 89.5% growth, other incomes stood at Rs 9.59 crores. 

Operating revenues, i.e, revenue from primary business activities in terms of US dollars grew 44.9% (YoY) and at the close of the quarter stood at $35.8 million. 

Profit after tax (PAT) for the quarter totalled Rs 44.44 crores surging 30.4% (YoY).

The company in its filing with NSE reported free cash flows of Rs 67.43 crores; having such handsome free cash in its balance sheet is a big achievement especially for a company that was listed only a year ago. 

Marching along with the growing total income, EBITDA margins also posted a 42.5% y-o-y rise and stood at Rs 70.12 crores. 

Happiest Minds added 8 more clients to its client base taking the overall tally to 186. Out of these clients, 65.9% are based in the US while 13% are Indian clients. This quarter the company added 3 more clients to the above $ 5 million categories. The company has set aside Rs 3.41 crores for Provisions & Deferred tax liability in the quarter. The company announced an interim dividend of Rs 1.75 per equity share of face value Rs 2 per share. 

Hits

  • The company added 258 new faces in its workforce taking the tally to 3,796 as of September 30, 2021.
  • The Bangalore headquartered company added 8 new clients, of which its deal with a leading supply chain industry leader for SaaS-based products was the biggest win. 
  • Great Place to Work® acknowledged the company in its list of India’s Top 50 Best Workplaces for Women 2021 for the third straight year. 
  • Operating Revenues in US$ terms grew 8.0% q-o-q and 44.9% sequentially. 
  • Total Income also grew 8.0% q-o-q; 45.9% when compared to 30 September last year. 
  • Diluted EPS for the quarter came out to be Rs 3.06 growing 26.4% y-o-y. 

Misses

  • Even though the company added 258 people to its workplace, its utilization rate came down to 79.7%, as against 82.1% in the last quarter. 
  • The company currently observes an attrition rate of 18.5%.
  • Customers from the US have seen a marginal decline as the share of customers from the UD fell from 67.8% to 65.9%.

Management commentary

The company’s MD & CFO, Venkatraman N, briefly commented on the quarterly numbers. He said “ the company is maintaining healthy free cash flows, and according to him the company posted an all-around performance throughout the quarter. He also added that the company has added 568 new faces to its workforce in the last 6 months. He was pleased to announce Rs 1.75/ equity share as an interim dividend guided by healthy capital return ratios. 

Joseph Anantharaju, Executive Vice Chairman, Happiest Minds Technologies said the company, inspired by its strong demand-oriented environment, was able to capitalize on most of its existing clients while winning new logos as well. 

To read the RA disclaimer, please click here.
Research Analyst: Bavadharini KS

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