Buy Happiest Minds Technologies; target of Rs 1190: KR Choksey

KR Choksey's research report on Happiest Minds Technologies

Happiest Minds Technologies Limited (HMTL)’ revenue for Q4FY23 is USD 45.9 mn, a growth of 1.3% on a QoQ basis and 15.02% on a YoY basis. The revenue in constant currency grew by 1.3% on a QoQ basis and 17.6% on a YoY basis. The EBIT stood at INR 792.3 mn, -0.39% on QoQ basis and 26.1% on a YoY basis. The PAT remains flattish on QoQ basis due to lower utilization rate and increased by 10.65% on YoY basis. The diluted EPS for the Q4FY23 is INR 3.98 as against INR 3.58 in Q4FY22. As of Q4FY23, there are 237 active clients and there has been addition of 7 clients in this quarter. As of Q4FY23, the count of total employees has reached to 4917 an increase of 306 employee on QoQ basis with the attrition rate declining to 19.8% in Q4FY23. The company declared a final dividend of 3.4 INR for this quarter, Free cash flow stood at INR 99.5 mn.

Outlook

We revised our target price to INR 1,190 based on a P/E multiple of 50x to the FY25 estimated EPS of INR 23.8 with an upside of 39.3% and hence we maintain our recommendation with a “BUY” rating.

For all recommendations report, click here