Despite a delayed deal renewal cycle this year, IT veteran Ashok Soota-led Happiest Minds has completed nearly all of its renewals, a big achievement, given last year's uncertainties over deal extensions that had led to the cycle getting pushed by a month to January 2025.
“We've been able to complete our renewals and that's a big thing, because last year same time, there was a fair bit of uncertainty even on the renewals and our hope and expectation is that we have a very good pipeline,” Executive Vice Chairman Joseph Anantharaju told Moneycontrol.
The company said its customers are feeling a 'little bit more comfortable' given that US macro indicators seem to be getting back on track.
“With the (US) election being a little conclusive, people felt a little better. And what we've seen in the last one month is a more positive outlook from customers towards,” Anantharaju added.
The Bengaluru-based company’s revenue in constant currency grew 0.8% sequentially and 28.2% on-year to over Rs 373 crore in the third quarter ended December 31, 2024. Net profit decreased 16% to Rs 50 crore in the same period. Read more here.
What Worked?
The company implemented a couple of initiatives at the beginning of the year which have paid dividends.
Firstly, Happiest Minds was able to close acquisitions. “We've managed to complete two acquisitions we got into. We announced the verticalisation and we've been able to put that structure and execute on that in place,” Anantharaju said. In 2024, Happiest Minds had acquired digital engineering and transformation services and software solutions firms PureSoftware and Aureus.
"If you don't make these investments today, you will be taken by surprise tomorrow. So it's an investment that we are making for the future," Managing Director and Chief Financial Officer Venkatraman Narayanan said.
Secondly, the company created six industry groups with respective heads.
Thirdly, Happiest Minds carved out a separate Generative Artificial Intelligence (Gen AI) business unit. “Hopefully this year we'll start seeing larger implementations from the PoCs (Proof of Concept) that we are on,” Anantharaju added.
Lastly, Happiest Minds said the company has created the position of a Chief Growth Officer. “So, all of that is playing into the positive demand environment that we're seeing,” he said.
Increasing Average Revenue
Average revenue per customer has inched up by about 30-35% for the company since its listing on the bourses.
“The average revenue per customer, which is a very important metric for us, shows to what extent we are able to realise the potential of a customer while managing our execution or delivery cost. That's an area that we've been trying to push up north,” Anantharaju added.
In Q3FY25, the average revenue per customer increased over 11% to $898,000 from $808,000.
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