Happiest Minds eyes 20% revenue growth next fiscal

Bengaluru: Happiest Minds, an IT services company promoted by veteran IT entrepreneur Ashok Soota, is confident of growing at 20 per cent in the next financial year, which is likely to be double the growth rate of that of the industry. The Bengaluru-headquartered firm also doesn't see any client concentration risk from its portfolio as it feels that they are evenly spread.

"There is a lot of pent-up demand from our existing customers and new customers. Without giving any guidance, we want to get back to over 20 per cent growth rate, which is double that of the industry growth rate. We are confident of (achieving) that kind of growth rate next year," said Venkatraman Narayanan, Managing Director and Chief Financial Officer of Happiest Minds. After a brief period of subdued demand, the Indian IT industry has witnessed demand revival as more global enterprises go digital amid the ongoing Covid pandemic. Against this backdrop, most domestic IT players are expecting to clock double-digit revenue growth in the next financial year after a likelihood of a low single-digit growth rate this fiscal year.

Narayanan also said the company is likely to cross $100-million revenue mark in the current financial year.

In the nine months ended December, Happiest Minds touched revenues of around $75 million with about 97 per cent of this coming from digital services. Among the verticals, edutech contributed the most with 24.9 per cent revenue share, while 20.2 per cent came from the hitech vertical. The vertical with significant contribution was the BFSI (banking, financial services and insurance) with 17.4 per cent share.

On the operating margin, the IT services firm expects to post a margin in the range of 22-24 per cent despite the likelihood of rising expenses in the coming quarters as employees come back to offices. Happiest Minds, which has a total of 155 clients by the end of December quarter, also said that it didn't see client concentration risk to its revenue portfolio. "Our average revenue per customer is $650,000, which is a nice trend. We are having 155 clients, which says that we are constantly adding clients," Narayanan said. "As far as client concentration is concerned, we believe that our clients are well spread out," he added. Currently, the IT services firm is working with 38 companies that figure in the Fortune 2000 list. The company draws 66.5 per cent of its total revenues from the top 20 customers, while the top 10 clients contribute around 49.4 percent to its revenues. Its top customer contributes 14.8 per cent to the company's total revenues.