IT services firm Happiest Minds Technologies on Tuesday reported a 32.1% on-quarter decline in net profit for Q4 FY25 to Rs 34 crore, which nearly halved compared to the fourth quarter of the previous fiscal, impacted by exceptional items on account of investments and recent acquisitions as well as a client default.
Revenue for the January-March period grew 0.3% on-quarter and 25.6% on-year and stood at Rs 629 crore.
Operating margins dipped from 24.5% to 14.6% on-year basis due to a Rs 12.5 crore write-off linked to a North America-based client who failed to meet payment obligations, Venkatraman Narayanan, MD and CFO, Happiest Minds told ET. However, it was purely bad debt and not related to ongoing macroeconomic factors, he clarified.
“Despite the setback, we’ve managed to deliver stable performance. Our adjusted PAT has grown Rs 50 crore and Ebitda by Rs 100 crore year-over-year,” Narayanan said, adding that the company had invested Rs 40 crore into its new GenAI-focused business unit, which also contributed to the margin dip.
Happiest Minds’ stock fell 2.59% to close at Rs 593.60 per share on the BSE Tuesday.
The company is hoping to grow with generative AI and improving macroeconomic conditions, as it looks to rebound from a tough fourth quarter impacted by a client default and sectoral volatility.
Joseph Anantharaju, co-chairman and CEO said that the overall sentiment is now improving with global trade tensions easing and geopolitical risks subsiding. “We are holding on to our guidance of double-digit revenue growth for FY26. Sentiment is definitely turning positive,” he said, noting that sectors like BFSI and healthcare are seeing renewed traction, while the high-tech vertical is stabilising post-client exits.
Anantharaju noted that GenAI is transitioning from proof-of-concept to full-scale deployment. “Clients are moving from just slapping on a GenAI interface to rethinking their entire application architecture around GenAI,” he said. The company is now working on agentic AI models as well. “We're seeing 10–25% productivity gains across software development and testing lifecycles,” he added.
On AI’s impact on workforce, the company said most clients are using productivity improvements to accelerate roadmaps rather than cut costs. “We haven’t seen any client ramp-downs due to AI,” Anantharaju clarified.
On hiring, Happiest Minds is taking a calibrated approach. While it skipped campus hiring last year, it plans to return to campuses in the coming cycle, albeit with smaller intake. Wage hikes are still planned for July, although the final quantum will be determined closer to rollout.
Revenue for the January-March period grew 0.3% on-quarter and 25.6% on-year and stood at Rs 629 crore.
Operating margins dipped from 24.5% to 14.6% on-year basis due to a Rs 12.5 crore write-off linked to a North America-based client who failed to meet payment obligations, Venkatraman Narayanan, MD and CFO, Happiest Minds told ET. However, it was purely bad debt and not related to ongoing macroeconomic factors, he clarified.
“Despite the setback, we’ve managed to deliver stable performance. Our adjusted PAT has grown Rs 50 crore and Ebitda by Rs 100 crore year-over-year,” Narayanan said, adding that the company had invested Rs 40 crore into its new GenAI-focused business unit, which also contributed to the margin dip.
Happiest Minds’ stock fell 2.59% to close at Rs 593.60 per share on the BSE Tuesday.
The company is hoping to grow with generative AI and improving macroeconomic conditions, as it looks to rebound from a tough fourth quarter impacted by a client default and sectoral volatility.
Joseph Anantharaju, co-chairman and CEO said that the overall sentiment is now improving with global trade tensions easing and geopolitical risks subsiding. “We are holding on to our guidance of double-digit revenue growth for FY26. Sentiment is definitely turning positive,” he said, noting that sectors like BFSI and healthcare are seeing renewed traction, while the high-tech vertical is stabilising post-client exits.
Anantharaju noted that GenAI is transitioning from proof-of-concept to full-scale deployment. “Clients are moving from just slapping on a GenAI interface to rethinking their entire application architecture around GenAI,” he said. The company is now working on agentic AI models as well. “We're seeing 10–25% productivity gains across software development and testing lifecycles,” he added.
On AI’s impact on workforce, the company said most clients are using productivity improvements to accelerate roadmaps rather than cut costs. “We haven’t seen any client ramp-downs due to AI,” Anantharaju clarified.
On hiring, Happiest Minds is taking a calibrated approach. While it skipped campus hiring last year, it plans to return to campuses in the coming cycle, albeit with smaller intake. Wage hikes are still planned for July, although the final quantum will be determined closer to rollout.
