Happiest Minds Q4 Results: The Secret Strategy Behind Their 15% Growth Plan | Business News

追加: 2026-05-30

[00:00:00]So, that's the management of happy uh of uh of Bata India. Let me in fact go across.

[00:00:05]We've got uh the management of Happiest Minds joining us as well. We've got Venkatraman Narayanan, who's the managing director, and Joseph Anantharaju, who's the co-chairman and CEO at Happiest Minds Technologies, joining us this morning. Of course, it's a day of IT. Uh Joseph, Happiest Minds, uh you've you've clocked in 9% constant currency growth in Q4, expected to grow to 12.5% uh in FY27 full year. Uh aspirations of 15% in the pipeline. What will help you get to that 15% growth number? And and uh how likely are you to get there?

[00:00:46]>> So, you know, if you look at the 12.5% that we've given as a guidance, that's at uh constant currency. And the 12.3% growth is uh INR. And if you look at our uh constant currency growth for FY 26 is 9.2%.

[00:01:02]And that is slightly short of the 10% guidance that we had given at the beginning of the year. So, there is a you know, 3 3.5% uh higher growth that we've uh uh guided or projected. With the you know, with the goal of reaching 15%. And if you look at the plan that we've made, right, it's a grounds-up plan. Uh each of the industry group and business units looked at the customers, projected out, you know, looking at Q4 trend uh across the four quarters. And the plan that's been developed is for 15%, but you know, given uh you know, to keep a little bit of buffer, we've made a commitment of 12.5%, but we're hoping to get to 15%.

[00:01:45]And there are three four things that give us confidence. Like, one is the fact that this is a grounds-up plan built by the industry groups, the business units, and the BDMs, right? So, they have uh used their It's not come top down.

[00:01:58]Second is a pipeline. We talked about it.

[00:02:01]There's a 27% increase in pipeline quarter on quarter. And what is happening is that within this pipeline also, there are quite a few large deals that cut across multiple years, which will give us stability in our revenue. I think the most important thing is the success of our AI first strategy. We're seeing good traction in the market, quite a bit of momentum, a lot of opportunities and cool cool through sales as well. And so all of this gives us the comfort or confidence that we'll be able to get that additional growth from 9.2 to 12.5% and hopefully get as close if not exceed 15% for the year.

[00:02:39]>> Hmm. Uh Venkatram Venkatraman, while Q4 revenue growth remained healthy, margins have missed expectations for you. Uh what were the key pressures during the quarter and how should margins trend in FY 27?

[00:02:57]>> As far as margins are concerned, our operating margin, which is EBITDA without other income, is at about 17.5% and we have maintained that trend consistently over the year. In fact, we have ended the year with about 17.5%.

[00:03:12]On margins itself, if you look at all the metrics, whether it is operating margin, PAT, PBT or adjusted PAT, all of them have shown both quarter on quarter growth and growth year over year. So it's been uh reasonably good year as far as margins are concerned. Yes, we did get benefits from the way currency moved, but that's something that we we are aware and we are we are working on improving our margin profile going into the next year. So while revenue growth is expected to, you know, get back to 12 and 1/2 or 15% in constant currency, as far as operating margins are concerned, we would like to take it up to 18.5%.

[00:03:52]I'm not giving guidance but that's our expectation because we are in an investment mode in our AI first strategy and would like to continue to invest while making sure that margins are protected. As far as you know margin guidance for the FI 26 we had talked about EBITDA guidance of between 20 to 22% we have ended the year with 20.4% so that's within the margin framework that we had we had kind of guided the market for.

[00:04:20]>> Right and and and on the 20 to 22% range quick follow up would you maintain that for FI 27 as well?

[00:04:30]>> I we are moving to you know operating margin or operating EBITDA we want to do between 17.5 to 18.5% that's the you know growth target that we have taken or the margin target that we have taken for internally going forward but as far as markets are concerned it's only growth guidance growth guidance is 12.5% in constant currency in revenue terms and the idea is to maintain the operating EBITDA while trying to improve it by 100 basis points.

[00:05:03]>> Joseph you know if I can come to you sequential constant current currency growth has remained muted in Q4 our client's decision making cycle still getting delayed across key verticals.

[00:05:19]>> So few look at our overall performance from vertical angle you know I think the happening factors that year on year and quarter on quarter the BFSI industry group or vertical continues to show very good growth and you know we had placed our bets carefully with the uh, acquisition of Aureus and Pure Software.

[00:05:48]So, it shows that, you know, the bet that we'd made is paying off.

[00:05:53]Uh, healthcare saw a little bit of drop during on a quarter-on-quarter basis, but if you look at it on a year-on-year basis, it showed very good growth. And that's our second largest vertical. There was a 12.8% uh, growth. You know, a quarter-on-quarter, sometimes there's some seasonality. You know, a project could either come to an end or we could have got some license revenue.

[00:06:14]And that's what happened with healthcare vertical on a quarter-on-quarter basis.

[00:06:19]Retail, we continue to see good good traction because there's a lot of adoption of GenAI and AI out there, and that's playing out well to some of the offerings that we have. And if you look at it from a geo perspective, I think India, that's a happening factor for us because there's there's quite a lot of activity taking place in spite of some of the near-term and short-term headwinds, as I see it, right from the geopolitical situation. There's quite a lot happening in India, and the fact that we're able to grow our India revenue and do it at good margins is is happening.

[00:06:52]We saw a little bit of during the year a couple of >> [groaning] >> I would say setbacks in US market, which have got rectified now, and that's beginning to come on track. All the other geos have done well. You know, I think we've been able to diversify our revenue base as well. Uh, you know, with APAC, Africa, Middle East growing very well year-on-year, and you know, diversifying our risk. So, setting us up well for you know, the current year.

[00:07:27]>> And Joseph, the education or EdTech vertical has been weak for multiple quarters now. Are you now seeing early signs of a revival given GenAI adoption?

[00:07:39]>> Sure. I I that's a very good question, one of the talking points I have for the earning score later.

[00:07:46]And I think we are seeing on two fronts.

[00:07:49]We are seeing you know, I would say budding shoots.

[00:07:55]One is as you rightly pointed out, there's higher adoption of GenAI in the tech segment because very content heavy.

[00:08:03]And that's getting slowly extended to some of the institutes and universities and the EdTech customers and platforms.

[00:08:10]They're infusing you know, GenAI whether it's for assessment or whether it's for virtual tutoring or to act as you know, your tutor assistance offline for students.

[00:08:26]So we've seen quite a bit of traction over there. But equally important I think we've kind of realized that many of the institutes and universities especially I would say in in in in in let's say in India, Southeast Asia, Africa, Middle East, their digital readiness is a little lagging and AI offers the ability to get this transformation done faster and to also infuse AI into their applications and infrastructure.

[00:08:58]Therefore literally leapfrogging generation of applications. And that we are trying to reflect in our EdUV platform which is a platform for managing the student life cycle in a institute or university. But what we've done is we've componentized or modularized it so that customers can pick up what they want. Let's say class analytics or student retention, right?

[00:09:22]And all of it is based on underlying AI models and you know, AI capabilities. That I think will also allow us to to overcome some of the challenges we had in the education segment and this segment should start showing growth again.

[00:09:42]>> Venkat, Happiest Minds now serves more than 300 customers including more than 990 billion dollar corporations. Where do you see the biggest wallet share expansion opportunities?

[00:09:57]>> Um now on those numbers we have got 306 customers at closing and we have also got 92 billion dollar customers. So while it gives you a sense of the growth that we are showing in terms of customer numbers, but more importantly billion dollar customers of 92 today contribute to about 58% of our total revenue. So the whole idea is to say that we are getting a large substantial part of our revenue from large customers who have got a potential to spend. So that's the that's the underlying theme and within these customers we have identified like 2025 high potential customers who are in various stages of business growth with us. There are very detailed account development plans that have been created along with the customer and the sales and the you know the hunting farming team and we are we are progressing on that into our growth. Many of these aspects have been you know baked into our growth plan for next year and the year which is why we are our confidence level is normally higher than what we normally would have exhibited.

[00:11:09]>> Okay, thank you so much both of you gentlemen for coming in and giving us that perspective with regard to Happiest Minds numbers as well as what we can expect going forward into FY27 with regard to that one. Absolutely flattened on that count. I wonder what's happening on the Nifty IT index as well as we triple that one up. The Nifty 50 of course has flattened as well. There's some bit [music] of weakness creeping in with the Nifty IT holding up beautifully, 2 and 1/2% higher. Uh uh and uh of course we'll continue to track that one. Uh but what we'll do is take a very short break, come back, continue coverage here. We speak with the uh with the management of Emphasis on the [music] other side. Stay with us.

[00:12:00]>> [music]