Happiest Minds Technologies PAT Drops 29% Despite Revenue Growth In Q1 FY25

Happiest Minds Technologies has seen a big drop in its Profit After Tax (PAT) for the first quarter of FY25, coming in at Rs 51.03 crore. This is a decrease of 29.1 per cent from the previous quarter and 12.5 per cent year-on-year (YoY). 

The company explained that the decline was due to non-recurring expenses this quarter, compared to a large exceptional write-back in the prior period and increased amortisation and financing costs from recent acquisitions.

The revenue for the quarter grew to Rs 463.83 crore, up from Rs 417.29 crore in Q4 FY24 and Rs 390.87 crore in Q1 FY24. 

In a statement, Venkatraman Narayanan, MD & CFO, Happiest Minds Technologies said, “The quarter was eventful, and our results include those of our two acquisitions, PureSoftware and Aureus. We saw our revenues in constant currency grow by 17.8 per cent year-over-year, while EBITDA increased by 13.3 per cent. The variation in PAT and PBT is primarily due to non-recurring expenses this quarter versus a large exceptional write-back in the previous period, and increased amortisation and financing costs from our acquisitions.”

The company’s EBITDA reached Rs 116.71 crore, or 23.9 per cent of total income, a 13.3 per cent increase from last year. Free cash flows were reported at Rs 115.69 crore and the diluted Earnings Per Share (EPS) was Rs 3.39.

The company’s Generative AI Business Services (GBS) unit contributed Rs 7.13 crore to the topline in Q1. 

“Happiest Minds has begun the new fiscal year by setting the foundation for the best performance since our IPO. Establishment of Gen AI business services, BU reorganization with industry groups into profit centers, and two excellent acquisitions have set us on a path of accelerated growth, which will be further manifested in successive quarters,” said Ashok Soota, Executive Chairman, Happiest Minds Technologies.

Happiest Minds’ workforce grew to 6,599 employees as of 30 June 2024, up from 5,168 in the previous quarter. Attrition edged up slightly to 13.5 per cent from 13.0 per cent, while utilisation improved to 78.2 per cent from 75.1 per cent.