In conversation with Sunil Gujjar, Head of IR & Associate Director – M&A, Happiest Minds Technologies

Our efforts across geographies would be to expand our footprint within our existing customers, cites Sunil Gujjar, Head of IR & Associate Director – M&A, Happiest Minds Technologies.   

The company reported consolidated income of Rs 274 crore for Q2FY22, up 46 per cent; while net profit jumped 30.4 per cent on a year-on-year basis to Rs 44.4 crore. What factors have contributed the most to help you outperform?  
Right from inception, we have been exclusively a digital services company with a strong brand recall. Even before the pandemic, we have consistently shown a good growth of 21 per cent CAGR in the FY18 to FY20 period. The pandemic enforced rapid acceleration to digital. Enterprises realized they must go digital to stay relevant to their customers, drive operational efficiencies or harness new revenues streams with technology at the core. Our results for the second quarter reflect the fact that we can address this heightened demand effectively by being the partner of choice for enterprises in their digital engagements.  

In the last 4 years, the US has accounted for roughly 75 per cent of your revenues. How are you working on geographically diversifying your revenue pool to lower revenue dependency on the US market?  
In absolute terms, all our focus geographies have shown good growth. The United States continues to be a hot market for digital innovation, experimentation, and transformation. Our focus will be to harness the opportunities that arise as a result. What has happened is the growth in other geographies has picked up considerably. Take, for example, Europe which is 11 per cent of our revenues. In the past few quarters, we have won several deals there. Growth from India and the rest of the world remain buoyant as we can capture a sizeable pie of our customer’s digital spending. To sum up, our efforts across geographies would be to win new logos of consequence and expand footprint within our existing customers.  

Currently, intellectual property (IP) led revenue accounts for 10 per cent of the company’s overall top line. How are you betting big on this revenue stream to complement your services and drive growth?  
We would like to differentiate between pure-play IP and what we call IP Led. The IP led revenues which are essentially solution accelerators can be used by our customers and help us deliver our services more efficiently. The solution accelerators are built ground up and continuously improved upon our learnings from customers. As part of our new ten-year vision statement, we will continue to drive 10 per cent of our revenues through IP led channel.  

What is your earnings outlook for the upcoming quarters?  
We do not provide forward-looking guidance for the near term. However, we aspire to grow 20 per cent consistently on an organic basis in the medium to long term while maintaining EBITDA in the 22-24 per cent range.  

What according to you are the ideal growth triggers for Happiest Minds Technologies in the coming 3-5 years?  
As digital continues its march to be all-pervasive, we will focus on being a strategic partner for the digital transformational journey of customers through a consulting-led approach, demonstrating thought leadership, and fostering an innovation mindset. Also, almost 87 per cent of our revenues come from repeat business which is our ability to make deep inroads into customers’ digital initiatives. The land and expand strategy will be pursued with greater vigour for increasing wallet share amongst existing customers. As a result, certain metrics like additions to the million-dollar customer list and average revenue per customer should show meaningful improvement from what we see today.