Happiest Minds Technologies Ltd. share price target

HMTL had generated a revenue of INR 3779.8 mn, registering a healthy growth of 25.75% on a YoY basis and 3.02% on a QoQ basis. Out of this total revenue, 49.4% comes from Product Engineering Services(PES), 28.9% from Digital Business Solutions (DBS), 19.5% from Infrastructure Management and Security Services(IMSS) and 2.2% from other sources.

Happiest Minds Technologies’ reported revenue of USD 45.4 million in Q3Fy23 with a growth of 2.1% on a QoQ basis and 26% on a YoY basis. The revenue in constant currency grew by 2.8% on a QoQ basis and 22.6% on a YoY basis. The total income is INR 37,46.8 million, a growth of 4.3% on a QoQ basis and 28.2% on a YoY basis. The EBITDA has increased to INR 9,72.6 million, a growth of 3.1% on a QoQ basis and 26.5% on a YoY basis.

Happiest Minds Technologies Limited (HAPPSTMN) Q2FY23 performance is marginally lower than our estimate.

We initiate coverage on Happiest Minds Technologies (HAPPSTMNDS) and assign an
ADD rating with a DCF-based target price of Rs1,075, assuming 25% revenue CAGR over FY22-FY32E, 20% EBIT margin, terminal growth rate of 6.5% and WACC of 11.5%.

Happiest Minds Technologies Ltd (HMTL) incorporated in 2011, is a Bangalore based IT service provider, which provides end-to-end solutions in the digital space. As of June 30, 2020, HMTL had 148 active customers and presence in countries like US, UK, Australia, Canada and the Middle East. The experienced Ashok Soota, who is the Promoter, Executive Chairman and...

improved from -9% in FY18 to 11% in FY20 and 18.5% in 1QFY21. FCF/EBITDA stood at ~80% in FY20 with the company generating RoE of 31.3% in FY20. The total issue size of the IPO is Rs7bn (upper end of price band) with fresh issue of 4.7% (6.65mn shares) aggregating up to Rs1.1bn and an OFS of up...

Rs. 2 each, (Comprising of fresh issue of 6,626,506 Equity Shares* (Rs. 110 cr.) and Offer for Sale of 35,663,585 Equity Shares (Rs. 592.02 cr.*) by Selling...

Happiest mind is a small sized IT services company promoted by Mr. Ashok Soota who was one of the founding members of Mindtree Ltd. Happiest Mind is uniquely positioned as derived 96.6% of its revenues in FY2020 from digital services that are expected to be the fastest growing segment in the IT sector. The company