Happiest Minds - Organisational Rejig For Better Growth: HDFC Securities

HDFC Securities Institutional Equities

Happiest Minds Technologies Ltd. recently announced changes to its organisational structure to move into an industry/vertical-based organisational structure.

From the earlier horizontal-based structure, the company announced its new vertical organisational structure comprising six industry groups –

1. industrial, manufacturing and energy and utility,

2. healthcare and life-sciences,

3. retail, consumer packaged goods and logistics,

4. banking, financial services and insurance,

5. hi-tech and media and entertainment, and

6. EdTech.

We spoke to the management of Happiest Minds and believe that the organisational structure change can accelerate its growth (by 2-3% over the medium term).

Notwithstanding the recent deceleration in growth, the current scale of the business, the distinction in quality and the disproportionate impact from potential recovery in discretionary services in the sector can keep valuation higher than peers (Happiest Minds – Higher for longer).

Maintain Add on Happies Minds with a target price of Rs 935, based on 38 times FY26E. High exposure to T1 client and EdTech vertical exposure are risks and quality of inorganic pursuits could be catalysts ahead.

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