Despite concerns about a potential US slowdown, Bangalore-based Happiest Minds Technologies anticipates healthy double-digit organic growth in FY26 and FY27, driven by strategic initiatives and acquisitions.
Happiest Minds chairman Ashok Soota expressed confidence in the company's future, stating they "we see no recession-driven slowdown" despite market predictions of a US slowdown. “As the IT industry has come under pressure, I have been feeling that it needs to be strengthened by a products & SaaS solutions approach,” he said. A key part of this strategy includes Arttha, a banking product acquired through PureSoftware. “A product team is enhancing its capabilities and transitioning it to a SaaS platform. Both the product and SaaS solution will co-exist,” said Soota.
"After a few years of delay, we finally completed two acquisitions--PureSoftware and Aureus whose results were integrated in Q1 of FY25. The wait had been worthwhile because both organizations were aligned with our culture, brought in excellent talent and the acquisitions were cash-accretive. The results of these acquisitions led to our growth in FY25 being well above industry average," he said.
The company posted a 7.53 per cent rise profit to Rs 248.39 crore in FY24 compared to Rs 230.99 crore in the previous fiscal. Revenue for financial year 2023-24 was at Rs 1,624.66 crore, a 13.66 per cent climb over Rs 1,429.29 crore in FY23.
In October last year, the company established a new business unit, Generative AI Business Services (GBS), headed by Sridhar Mantha, the company's erstwhile CTO.
Happiest Minds has also appointed a Chief Growth Officer, Maninder Singh, who is responsible for net new sales. Singh's team is already making a visible impact by bringing in new logos, he said.
Happiest Minds 10 Strategy Changes
Happiest Minds Technologies has announced 10 strategic transformational changes aimed at driving growth and innovation amid industry disruption caused by macroeconomic shifts and the rapid rise of Generative AI (GenAI).
These changes is to drive growth and innovation, focusing on acquisitions, SaaS, and HaaS solutions, aiming for double-digit growth in FY26 and FY27 amid IT industry challenges.
The company aims to offer solutions tailored to the needs of PE firms, including security risk assessment, tech debt management, and innovation strategies.
These changes, initiated in FY24 and extending into FY26, come after the completion of two key acquisitions—PureSoftware and Aureus–which led to a strong growth in FY25, adds Soota.
Acknowledging challenges faced by the IT industry in recent years, Soota emphasised the need for a shift towards a products and software-as-a-solutions driven approach.
Future plans
Looking ahead, it plans to develop a private equity company eco-system and portfolio companies, address the requirements of GCC companies and create a large accounts focused strategy which will take about 10 – 15 of the company’s $2-3-million accounts, and raise them to $10-20 million.
On the product front, the company is enhancing its product capabilities and transitioning to a SaaS-based model, ensuring both solutions will coexist. Furthermore, it is set to launch a Hardware as a Service (HaaS) offering in two phases: with the product to be introduced by Q4, followed by the launch of the HaaS solution a year later.
Elaborating on these changes, Joseph Anantharaju, Co-Chairman & CEO, shared, “Over the last 13-14 years, we have acquired many logos of consequences and effectively deployed our ‘land and expand’ strategy. This has resulted in the average revenue per customer consistently increasing, resulting in many accounts that are $2-3 million in size, in addition to a few customers that are $5 million and $10 million customers. We want to take this strategy to the next level by moving some customers into the $20 million range and creating more $5 million and $10 million accounts.”
As part of this strategy, he said Happiest Minds will invest in seasoned client partners to bring focus and elevate conversations, creating customer-specific solutions, aligning incentives and responsibilities across several functions, and giving these sets of accounts prioritised focus and treatment.
Venkatraman Narayanan, the company’s Managing Director & CFO, emphasised additional focus areas, including sustaining “industry-leading margins” after 18 consecutive quarters of exceptional EBITDA performance, as well as continued efforts in Mergers & Acquisitions (M&A).
No comments:
Post a Comment