Happiest Minds Shares Hit Four-Month Low As Q1 Net Profit Falls

Shares of Happiest Minds Technologies Ltd. fell to hit their lowest level in four months after the company reported a sequential decline in its net profit in the first quarter of fiscal 2025.

Net profit of the company was down 29.1% at Rs 51 crore in the April-June period, compared to Rs 71.9 crore in the same period last year.

• Revenue up 11.2% at Rs 464 crore vs Rs 417 crore.

• Ebit down 8.1% at Rs 62.8 crore vs Rs 68.3 crore.

• Margin at 13.5% vs 16.4%.

• Net profit down 29.1% at Rs 51 crore vs Rs 71.9 crore.

The company said the quarter was eventful, and said that its results are inclusive of two acquisitions—PureSoftware and Aureus. "Our revenues in constant currency grew year over year by 17.8%, while Ebitda grew by 13.3%," it said.

"Variation in PBT and PAT are primarily on account of non-recurring expenses in the current quarter, versus a large exceptional write-back in the previous, and increased amortisation and financing costs arising from acquisitions."

The company's profit and loss was hit by Rs 6.5 crore on account of acquisitions, said Venkatraman Narayanan, managing director and chief financial officer of product and digital engineering services of the company. It also had a high base of Rs 13 crore write back in previous quarter, he told NDTV Profit.

Going ahead, the company is set on its growth target to reach billion dollar vision by 2031. Entry into newer geographies will help the company penetrate deeper into existing and new set of customers, he said.

While he expects some non cash accounting debits related to acquisitions, including unwinding of interest and write-off of intangibles, in coming quarter, he said growth shown from these acquisitions will cover up for those.

Degrowth in manufacturing business was impacted by projects that ended in the beginning of the quarter and the company is discussing with its customers on the next phases, said Joseph Anantharaju, executive vice chairman and chief executive officer of product and digital engineering services.

Moreover, two accounts got reclassified from manufacturing towards hi tech and industrial, but it expects sequential growth in its segment going ahead. Other segments including BFSI and healthcare have benefitted from organic growth and acquisitions.

Shares of the company fell as much as 2.8%, the lowest level since April 1, before paring loss to trade 2.35% lower at Rs 754.55 apiece, as of 11:48 a.m. This compares to a 0.15% decline in the NSE Nifty 50.

The stock has fallen 15.8% year-to-date and 18.7% in the last 12 months. Total traded volume so far in the day stood at 1.85 times its 30-day average. The relative strength index was at 26.28, indicating that the stock may be oversold.

Out of six analysts tracking the company, five maintain a 'buy' rating and one recommend a 'hold', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 16.4%.