In conversation with Sunil Gujjar, Head (IR) and Associate Director (M&A), Happiest Minds Technologies Ltd

In this exclusive interview, Sunil Gujjar, Head (IR) and Associate Director (Mergers and Acquisitions), Happiest Minds Technologies Ltd., elaborates about the reasons that have fuelled the company’s growth while highlighting future strategies

Happiest Minds Technologies’ net profit for Q4FY22 rose 44.5 per cent on an annual basis to Rs 52.1 crore. What factors are responsible for your industry-leading growth along with such a superior margin profile?

Over the years we have built a company which has a strong brand recall of ‘born digital, born agile’ with sound account management practices, delivery excellence and thought leadership which makes us the partner choice for enterprises seeking to build, transform and maintain their digital landscape. Pure play digital focus, consulting-led approach and our centres of excellence leading the technology curve with next-generation digital offerings help us command premium pricing. Also, our delivery channel is offshore heavy with 96 per cent of our teams working out of delivery centres in Bengaluru, Pune and Noida. A combination of all these factors has led to the strong growth you see.

The Product Engineering Services (PES) segment has contributed 46.3 per cent to the revenue mix. Going forward, how much potential does this segment hold and will it persist to account for a similar percentage of the revenue mix?

Our vision in PES is to help our customers capitalise on the transformative potential of digital by building products and platforms that are smart, secure and connected. Our offerings extend across the development lifecycle from strategy to final roll-out while ensuring quality. Enterprises across industries continue to strengthen their digital capital furthering investments in cloud native applications, analytics or artificial intelligence, Industry 4.0, IoT, low code or no-code applications which will continue to fuel demand and provide Happiest Minds Technologies with multiple avenues for growth.

Can you share your views regarding the relatively higher voluntary attrition rate recorded by the company?

Attrition continues to be high overall for the industry, so we are not immune to it. However, we are putting our best foot forward to manage it with our compelling talent acquisition and retention programs reflecting in strong net head count addition of 22 per cent on a year-on-year basis. We started recruiting from campuses in FY22 and will continue to hire at a higher pace in FY23. Guided by our mission of ‘happiest people, happiest customers’, a culture of camaraderie, innovation, and collaboration empowers our teams to drive effective outcomes for our customers and providing enriching experiences. Multiple recognitions by Great Place to Work Institute and superior Glassdoor ratings are a testimony to our efforts over the years to build an organisation that keeps people at the centre of everything we do.

Amongst the key project wins by the company during the quarter, which projects would have a notable impact on growth in the coming quarters?

The key wins highlight our ability to shape the digital journey of our clients across our focus geographies and service offerings. Our clients trust us for the significant value and digital depth we bring to the table, which is reflected in our strong new customer additions of 33 logos during the year and a quarter-on quarter increase in the average revenue per customer which grew by 22 per cent over FY21 to USD 774,000. The success of our ‘land and expand’ strategy resulted in an increased count of large customers. Our USD 5-10 million clients increased by 1 to a total count of 4; our USD 3-4 million clients increased by 2 to a total count of 8; and our USD 1-3 million clients increased by 9 to a total count of 25. We will continue to thread this path in FY23 and beyond.

Currently what are your top strategic objectives?

Our top strategic objectives could be defined thus:

• Accelerate profitable growth with a superior margin profile and return on capital ratios.
• Continuously adapt to evolving technology landscape by building ahead of the curve offerings to serve our customers better. For example, build low code or no-code service offerings and gradually carve it out as a centre of excellence.
• Strengthen our delivery channels across our existing centres in Bengaluru, Noida and Pune along with expansion into cities like Bhubaneshwar.
• Ensure that our happiest minds gradually and safely return to our office spaces as part of our ‘back-2-smiles’ initiative.
• Look at inorganic growth opportunities tactically to strengthen the length and depth of our offerings.
• Enhance our talent acquisition programmes and improvise on our people engagement practices.

What is your earnings’ outlook for FY23?

While we don’t give a forward-looking guidance for the current fiscal, our aspiration is to grow consistently at 20 per cent in the medium to long term.