Happiest Minds Q3 profit dips 16%, revenue up 27%

Happiest Minds Technologies reported a 16% year-on-year (YoY) drop in net profit for the third quarter ending December 2024 at Rs 50.1 crore impacted by investment outlay. The profit stood at Rs 59.6 crore in the third quarter a year ago.

Revenue during the quarter rose 27% from a year ago to Rs 627.2 crore, from 493.7 crore in Q3FY24. Sequentially, both the profit and revenue rose slightly by 1.2% from Rs 49.5 crore and 0.5% from Rs 623.8 crore, respectively.

“There is a margin expansion, so profitability in terms of percentage to your top line, yes, it may have retreated, adjusted slightly, but you should focus on growth of profit YoY which is just like we revenue growth has happened 28% in constant currency and in rupee terms almost 30%,” said Venkatraman Narayanan, managing director and chief financial officer.


Its operating margin were squeezed to 17.5% from 17.9% in previous quarter and 20.1% from a year ago. Without the investments, the Ebidta margin stood at 21.1% as against 21.7% in Q2FY25 and 24.2% in Q3FY24.

Happiest Minds estimated a guidance of 20-22% Ebidta range going forward.

Geographically, the main revenue drivers for the company were India and Asia Pacific (APAC) regions, even as it witnessed a decline in the core North American region.

In terms of verticals, BFSI (banking financial services & insurance) with a revenue share of 23.6%, was a huge driver helped by our acquisition from PureSoftware, hi-tech and retail CPG. The company got hit by challenges in its second-largest vertical edutech dropping due to drop in two key clients.

“As part of our strategy for this year, we're looking at another segment, the professional workforce development, because a lot of effort is being put into reskilling, multi-skilling, upskilling etc. So that segment seems to be doing well,” said Joseph Anantharaju, executive vice chairman.

Overall, during the quarter, Happiest Minds accelerated its net new growth opportunities while increasing the number of large customers. “Our acquisitions are allowing us to diversify our revenue base across geos and verticals while leveraging synergies to accelerate growth,” Anantharaju added.

The company added 50 employees during the quarter taking the total headcount to 6630 as on December end.

During the quarter, Happiest Minds also announced fund raising of Rs 500 crore through qualified institutional placement.

The results were announced late evening on Tuesday. On Wednesday, after falling more than 1.35%, Happiest Minds shares closed 0.88% down at Rs 700.85 apiece on the BSE. Benchmark Sensex ended 0.40% lower.