IT company Happiest Minds Technologies has reported 44.5 per cent rise in net income at Rs 52 crore for March quarter, on a 39 per cent growth in revenue amid record high attrition that has almost doubled over the previous fiscal year.
During the quarter, the mid-sized software firm said, its revenue rose to Rs 310 crore, clipping at 38.8 per cent year-on-year and 6.2 per cent sequentially.
For the full year, it booked a net income of Rs 181 crore, up 11.5 per cent over the pandemic hit FY21.
The bottomline would have been higher had it not for the full tax payout at 25.5 per cent rate, and the diminishing base effect, the management said, adding this is by far the best amongst domestic peers.
But the attrition rate soared to 22.7 per cent during the quarter with utilisation rate at 79.4 per cent.
In FY21, the churn rate was only 12.4 per cent and the management is dismayed at the way employees are shopping jobs.
Happiest Minds has been having one of the highest attrition rates in the industry and the level has risen steadily in the year.
From 12.1 per cent in FY21, it jumped to 17.8 per cent in Q2, 21.1 per cent in Q3 and 22.7 per cent in Q4.
In fact, the whole industry saw attrition jumping in FY22 as startups snapped up talents like there in no tomorrow which in turn induced employees to do job-shopping more aggressively.
While Infosys’ attrition rate touched 27.7 per cent in Q4, up from 25.5 per cent in Q3 and 10.9 per cent Q4FY21, TCS reported 17.4 per cent churn in the fourth quarter, up from 15.3 per cent in the December quarter.
Happiest Minds net added 940 employees, and 2,930 gross in the year, taking its headcount to 4,168.
It net added only 147 in Q4, as against its initial plans of net adding 300 fresh faces in each quarter.
On the hiring target for FY23, Joseph Anantharaju, executive vice-chairman, told PTI on Friday that if "we can replicate the FY22 hiring level, we will be happy. Because our conversion rate from an offer letter is only 65 per cent as most job-hoppers are using an offer letter to shop around. If we can touch 5,000 by March 2023, we should be fine."
Attributing multiple reasons for high attrition which was tempered in the pandemic year but came back with an aggression in FY22 for the entire industry, Venkatraman N, the managing director & chief financial officer, said the whole industry is grappling with high attrition.
One of the main reasons for the same is remote working, which has made it easier for people to switch jobs. Secondly, startups are grabbing techies with deeper digital skills and so are the global software players and domestic ITES players who have captive centers in the country.
Today's youth is looking for jobs mostly for shopping around or bargaining for a better increment from the present employer, Anantharaju averred.
On growth, they refused to give guidance but said in the long to the medium-term "we will grow 20 percent organically every year over the next five years."
On margin target, which printed in at 26.3 percent in the quarter, Venkatraman said predicting the margin is complicated and is like predicting the weather today.
On-demand side, Anantharaju said they added 11 new clients taking its client base to 206, and hopes the momentum continues to be good. Customers haven't pulled back despite all the headwinds like spiking inflation, supply chain disruptions, and the war in Ukraine.
The company will open a center in Bhubaneswar this fiscal year and will be adding one more but the location is not identified yet.
Cash flows for the year stood at Rs 289 crore and 98.6 percent of the operating profit.The company stock was trading 88 basis points up at Rs 998.70 on the BSE, whose main barometer Sensex was down 170 basis points.