Happiest Minds Technologies Ltd.

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 Happiest Minds Technologies Ltd.
Industry LTP Recommendation Base Case Fair Value Bull Case Fair Value Time Horizon
IT Consulting & Software Rs. 648 Buy on dips to Rs 604 -608 band & add more on dips to Rs 560-564 band Rs. 671 Rs. 722 2 quarters
HDFC Scrip Code HAPMIN Our take:
BSE Code 543227 The digital technologies space is growing at 15-20% CAGR and, as per Gartner, it is expected to reach US$ 900bn (34% of total technology
NSE Code HAPPSTMNDS spends) by FY25E, from US$ 490bn in FY21E. Digital technology has become an important aspect for businesses and clients are looking to
Bloomberg HAPPSTMN IN use emerging technologies such as cloud, analytics, IoT and automation to expand product offerings, enhance productivity, and provide
CMP Apr 27, 2021 648.0 better customer experience. While most customers were already on the path of digital transformation pre-pandemic, the pace of adoption
Equity Capital (Rs cr) 29.4 then was slow, but it has now picked up due to COVID. Happiest Minds (HMTL) derived 96.6% of its Q3FY21 revenues from digital
Face Value (Re) 2.0 technologies, with strengths in cloud and Enterprise SaaS (Software-as-a-Service) space. Segment-wise, Product Engineering Services (PES)
Equity Share O/S (cr) 14.7 contribute ~50% of revenue, followed by Digital Business Services (DBS) 24.5%, Infrastructure Management & Security Services (IIMS) 21.5%
Market Cap (Rs cr) 9516.8 and the residual is attributed to Others.
Book Value (Rs) 28.0
Avg. 52 Wk Volumes 415712 Happiest Minds has strengthened its relationships with independent software vendors (ISVs) like Amazon AWS and Microsoft in the past 3-
52 Week High 694.9
4 years. It has also established a ground connect with their technical account managers for prospective customers. In order to improve
52 Week Low 285.6
domain expertise and expand clientele, it has increased cross-selling to the existing clients of Microsoft Technologies. Moreover, alliances
and partnerships have been its main source of lead generation. It plans to deepen its relationships with other ISVs including Google Cloud,
Share holding Pattern % (Mar, 2021)
Promoters 53.3
Salesforce, Appian and Mulesoft. Edutech is amongst the best performing segments for the company whose revenue contribution increased
Institutions 14.4 from 18% in FY16 to 26.3% for 9MFY21. Also Automation as a percentage of revenue has been constantly growing from 20.7% in FY20 to
Non Institutions 32.3 25.5% for 9MFY21.
Total 100.0
Recently, the company acquired Pimcore Global Services (PGS) to expand its digital e-commerce and data management solutions and
partnered with Ilantus Technologies to enhance next generation capability.
Fundamental Research Analyst
Abdul Karim We expect a good potential for Happiest Minds to improve its average revenue per client metric over the next 3-5 years, led by focus on
[email protected] client mining, expanding participation in RFP-related deals and offerings in the digital and infra service segments, and investing in domain
expertise like BFSI, Retail and Manufacturing by hiring business analysts, domain experts, etc.

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Happiest Minds Technologies Ltd.
Valuation and Recommendation
Happiest Minds has a diversified mix of services, multiple longstanding client relationships spread across verticals, and healthy cash on the
balance sheet. We expect it to pursue inorganic acquisitions (in digital e-commerce and data management solutions) and expect the
company’s revenue to grow well in the long term. Further, a visible and consistent growth in the digital business has resulted in stable and
consistent growth in the past fiscal coupled with its legacy business performance.
Historically, the company has acquired three companies until date; while OSSCube and Cupola Technologies were relatively small in size, the
recent acquisition of PGS could potentially add ~10% revenue growth in FY22F. We expect more M&A activity in the coming quarters.
Happiest Minds deserves a premium because it could grow faster than its midcap peers and maintain margins. Since the company claims
that 97% of its revenue comes from digital services, we assume higher growth rates.
We believe the base case fair value of the stock is Rs 671 (46.0x FY23E EPS) and the bull case fair value of the stock is Rs 722 (49.5x FY23E
EPS) for the next two quarters. Investors can buy the stock on dips to Rs 604-608 band (41.5x FY23E EPS) and add further on dips in the
Rs 560-564 band (38.5x FY23E EPS). At the LTP of Rs 648, the stock is trading at 44.4x FY23E EPS.
Financial Summary (Consolidated)
Particulars (Rs Cr) Q3FY21 Q3FY20 YoY-% Q2FY21 QoQ-% FY20 FY21E FY22E FY23E
Total Operating Income 192.8 171.5 12.4 182.8 5.5 698.2 754.2 951.3 1,158.0
EBITDA 51.2 24.0 113.1 44.3 15.6 97.1 181.8 216.9 262.9
Depreciation 5.2 5.1 1.4 5.1 0.8 20.2 20.5 23.3 30.3
Other Income 8.5 4.1 107.6 5.1 66.7 16.0 29.0 32.3 34.7
Interest Cost 1.3 1.6 -23.2 1.6 -21.3 8.0 6.6 9.2 7.6
Tax 11.1 0.0 - 8.6 29.5 1.9 22.0 35.8 45.5
APAT 42.2 21.4 97.1 34.1 23.7 71.7 161.6 181.0 214.3
Diluted EPS (Rs) 2.9 1.5 97.1 2.3 23.7 4.9 11.0 12.3 14.6
RoE-% 27.0 29.1 25.6 24.2
P/E (x) 132.7 58.9 52.6 44.4
EV/EBITDA 99.2 51.5 43.1 35.2
(Source: Company, HDFC sec)

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Happiest Minds Technologies Ltd.
Recent triggers
Digital acceleration and industry transformation to bring more opportunity of revenue generation
Globally, organizations are looking to capitalize digitization benefits through better cost reduction, service automation, and efficient work
channels. In the current digital era, old and legacy investments are considered as cost overheads as the Cloud-based digital service offerings
present valuable opportunities for enterprises of various sizes. Digital technology has been constantly gaining traction, led by the rising
adoption of smartphones, high internet speed, and social distancing due to COVID-19. As a result, new age technologies like cyber security
would protect businesses against any issues emanating from the work-from-home scenario, while application development would help
customers transact virtually and Cloud would enable seamless and efficient online transactions, which are already witnessing robust growth.
Digital transformation, particularly in the area of Cloud, IoT, SaaS (Software As a Service), cyber security, edge computing, Artificial
Intelligence (AI), and Analytics, is expected to play an important role in driving growth and will become an integral source for leading in the
future.
Revenue of digital segment trend-%

(Source: Company, HDFC sec)

Digital transformation is the outcome of changes that take place when digital technologies are applied. Transformation helps enterprises
improve customer experience, optimize workforce, enhance operational activities, and transform products and services. Technology
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Happiest Minds Technologies Ltd.
companies are planning to capitalize on the ongoing digital transformation in the businesses. The market for digital technologies is growing
at 15-20% CAGR and is expected to reach US$ 900bn by FY25E from US$ 490bn in FY21E, as per Gartner. The global public Cloud service
revenue is forecasted to reach US$ 308.5bn in 2021 and US$ 354.6bn by 2022.
Happiest Minds has a diverse portfolio of solutions and offerings in Product Engineering Services (PES), Digital Business Services (DBS) and
Infrastructure Management & Security, which engage with the end-to-end lifecycle of a customer’s digital journey. The company derives
96.6% of its revenue from digital technologies.

Recent acquisition of Pimcore Global Services to add incremental growth ahead

On 31 Jan 2021, Happiest Minds acquired 100% ownership interest in the US-based Pimcore Global Services (PGS) for US$ 8.25 million (about
Rs 60 crore). PGS is a digital e-commerce and data management solutions company.
PGS has a strategic partnership with Pimcore Austria for delivering solutions around Pimcore, an open-source framework which helps
enterprises establish a robust digital presence through seamless data and experience management. PGS and Happiest Minds have a
successful strategic partnership, pursuant to which the latter has been rendering offshore services to the former. Happiest Minds has been
a Gold Partner of Pimcore for the past several years and the combined capabilities will enhance its global digital commerce practice.

Happiest Minds considers PGS among its list of US$ 2mn plus customers. According to the company, PGS booked revenue of US$ 10.6mn
and margins of 25%-26% as of 31 December 2020. The company has on boarded 94 plus PGS resources and 60 clients. PGS clientele includes
customers across retail, consumer packaged goods, and manufacturing verticals. The company infused Rs 61cr of foreign currency term loan
to fund the acquisition in February 2021 (source; India Rating). The acquisition will further strengthen Happiest Minds' offerings and
leadership in the digital transformation space. It will also help create greater digital capital for customers and facilitate more customer logos
of strategic consequence.

Partnership with Ilantus Technologies to enhance next generation identity and Access Management Security Services
On 11 March 2021, Happiest Minds entered a partnership with Ilantus Technologies to enhance its Identity and Access Management
capabilities for supporting customers in their cyber security journey. The company has always strived to adapt next-gen technologies like
Robotic Process Automation (RPA) and block chain into the Identity and Access Management landscape.

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Happiest Minds Technologies Ltd.
This partnership enables Happiest Minds to manage and safeguard an organization’s intellectual property from Identity and Access theft
while enhancing their risk and regulatory governance landscape; the key use cases include:
 Privileged Access Management and Threat Analytics
 Identity-as-a-Service (IDaaS)
 IDAM & Privileged IDAM for Bots
 RPA- Identity Automation
 Cloud Access Management
 Password less Authentication
 Predictive Identity & Access Governance
 Risk-based/Adaptive Authentication
The partnership with Ilantus could strengthen the Identity and Access Management within organizations by leveraging technologies such as
Artificial Intelligence (AI) and Machine Learning (ML). As a reseller and partner of Ilantus Technologies, Happiest Minds is committed to
minimizing risks arising from identity and access thefts while improving customer experience.

Long-term triggers
Established and diversified client metrics across verticals and geographies
Happiest Minds client and vertical concentration has been strong over the past and the company had an active client base of 155 in Q3FY21.
The average revenue/client stood at US$ 683k in Q3FY21 vs. US$ 615k in FY20 and we see potential to scale, given (1) exposure to 38 clients
with US$ 1bn+ revenues, which provides access to large IT budgets; (2) increased focus on account mining led by aligning sales incentives to
cross-selling, focus on solution approach to clients’ problems; and (3) investing in domain and consulting expertise and onsite presence.
In FY18, FY19, FY20 and Q3FY21, the company’s external customers located in the United States contributed 73.5%, 75.5%, 77.5% and
72.2%% of revenue from contracts with them, respectively. A single customer located in the United States contributed in the range of 12-
15% over the past four years.
Happiest Minds generates revenue from operations from providing digital IT services and contributed 96.6% of revenue in Q3FY21. The
company has developed a culture focused on innovation, technology leadership and process excellence, which help it maintain a strong
reputation with customers.
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Happiest Minds Technologies Ltd.
Average Annual Revenue per Client (US$,000)

(Source: Company, HDFC sec)

Happy Minds is run and supported by experienced management team

Happiest Minds is led by its executive chairman, Mr. Ashok Soota, and a credible team with ~1-2 decades of experience in IT management.
The team is led by Mr. Soota, the founder of Mindtree and former vice chairman of Wipro. He is responsible for the company’s strategy,
day-to-day operations, and decisions. He has held leadership roles and P&L responsibilities with larger peers like Wipro, Mindtree, EDS and
MuSigma.
Mr. Venkatraman N, Managing Director and CFO, and three business unit heads, Mr. Joseph Anantharaju (Executive vice-chairman and CEO
of Product Engineering Services), Mr. Rajiv Shah (CEO of Digital Business Services) and Mr. Chaluvaiya Ramamohan (CEO of Infrastructure
management & security services) have the ability to scale businesses.
End-to-end capabilities span the digital lifecycle from roadmap to deployment and maintenance
Happiest Minds’ core competency is full lifecycle software development services, including design and prototyping, product development
and testing, component design and integration, product deployment, performance tuning, porting, cross-platform migration and ongoing
support. The company has developed experience in each of these areas by working collaboratively with partner ISVs and technology
companies, creating a foundation for the evolution of its other offerings, which include custom application development, application testing,
enterprise application platforms, application maintenance and support, and infrastructure management.
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Happiest Minds Technologies Ltd.
The company’s multiple business units also help cross-sell solutions and services to existing customers. It provides customers with a digital
roadmap for transformation, and help them upgrade their existing IT systems and implement SaaS platforms.
Existing partnerships with Independent Software Vendors (ISVs) and strategic Acquisitions over the past
HMTL has long-standing relationships with global ISVs and technology firms for developing various key features of their product portfolios.
Some of the current partners include Microsoft, Amazon Web Services, NetSuite, and Salesforce (Source: Frost & Sullivan Report). The
company’s focus on software product development for such ISVs has shaped key aspects of the service offerings as well as the culture of
software engineering excellence, enabling it to expand the services into other key industry verticals. In addition, its work with companies
involved in developing emerging technologies such as Cloud and mobile keeps it on the forefront of IT, strengthens its relationships with
established ISVs and other customers, and enables it to attract new customers.
In 2018, HMTL acquired the management interest in OSS Cube LLC, a Texas-based company and a division of OSS Cube Solutions Ltd to
expand the DBS business unit. Pimcore (a client acquired through this acquisition) has award winning software, which delivers significant
business value by breaking up data silos that exist in many enterprises. In 2018, HMTL also acquired Cupola Technology Pvt Ltd to expand
the IoT CoE. The IoT CoE was conceptualised and created in FY17, and with the acquisition of Cupola tech, a Bengaluru-based IoT solutions
and services firm, HMTL was able to expand its IoT CoE.
Strong fundamentals led by healthy debt protection metrics and liquidity
 The company has reported stable and strong revenue growth in the past. In FY20, the company generated total revenue of Rs 698.2
crore, which grew at a CAGR of 22.8% over FY18 to FY20. We expect consolidated revenue to grow by 26.1% and 21.7% in FY22E
and FY23E respectively.
 Operating profit grew to Rs 104.7 crore in FY20 from negative operating profit of Rs 18.6 crore in FY18 and operating profit margins
have risen sharply this year, they may only head down from current levels. To start with, some of the pandemic-related savings on
travel etc. will soon reverse. Besides, there is a lot of competition for talent in the digital space, and for small firms such as Happiest
Minds, it can be a challenge to maintain margins if attrition rises.
 The company reported return on the net worth of 27% with a total debt-to-equity ratio of 0.6x for FY20. We expect dividend per
share at Rs 2.0 and Rs 2.5 to the shareholders.
 Happiest Minds strong cash and cash equivalents stood at Rs 412.5 crore in 9MFY21 vs. Rs 230.6 crore in FY20 and Rs 138 crore in
FY19. The company received net IPO proceeds of Rs 110 crore and has majorly invested its cash in mutual funds. The cash flow from
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Happiest Minds Technologies Ltd.
operations were strong and increased to Rs 115 crore in H1FY21 vs. Rs 108.9 crore in FY20 and Rs 44.6 crore in FY19, due to an
increase in the EBITDA and favourable working capital changes.
 The net working capital cycle was moderate and reduced to 30 days in 9MFY21 vs. 42days in FY20 due to the increase in creditor
days.
 Furthermore, the company infused Rs 61 crore of foreign currency term loan to fund the acquisition in February 2021 (source; India
Rating). The company has moderate debt repayment obligations of Rs 12.7 crore in FY21 (around Rs 9.2 crore repaid till January
2021) and Rs 20.4 crore in FY22. The company also has lease payment obligations of around Rs 3.5 crore and Rs 2.8 crore in FY21
and FY22, respectively.
 The company intends to use the surplus cash and cash equivalents to fund its working capital requirement and is also open for
further acquisitions.
 We expect the FCF to remain positive, going forward, even after factoring in annual capex. Because of cost rationalization efforts,
the company could see growth in profitability as well as better return ratios in the future.

Free Cash Flow (Rs cr) Working Capital Cycle (Days)

(Source: Company, HDFC sec)

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Happiest Minds Technologies Ltd.
What could go wrong?
 Rupee appreciation against the US$, pricing pressure, retention of the skilled headcount, strict immigration norms and rise in visa costs.
 The increasing competition and pricing pressures from the existing incumbents may impact the company's future growth and
profitability indicators. Happiest Minds is adapting to the changing technology landscape by focusing on digital technologies.
 The US contributed 72.2% of the company’s revenue in Q4FY21. The existing and potential competitors to businesses may increase
their focus on the United States market, which could reduce its market share and increase competition. The concentration of revenues
from operations from the United States heightens its exposure to adverse developments related to competition.
 Happiest Minds derived 15% of its revenue from one top client, 34% of its revenues from its top-5 clients and 49% from the top-10
clients in Q3FY21; the moderately high dependence on a single client exposes it to client concentration risks. However, this risk is
partially mitigated by a strong and established relationship and the growing wallet share of business with the client.
 The company uses third-party software, hardware and SaaS, technologies from third parties that may be difficult to replace or which
may cause errors or defects in, or failures of, services or solutions.
 A substantial portion of its customers are concentrated in a few specific industry verticals: Edu Tech, HiTech, Retail, TME and BFSI. The
company’s business growth largely depends on continued demand for services from customers in these industry verticals. A downturn
in any of its targeted industry verticals, a slowdown or reversal of the trend to outsource IT services in any of these industries or the
introduction of regulations that restrict or discourage companies from outsourcing could impact demand for its services.
 Any reputation loss on account of breach in compliance can impact the company’s growth prospects as well as new order inflows.
 The company faces delivery and execution risk arising out of changing customer requirements, comprehension of those requirements,
and timeliness of the response.
 Any shift in customer preferences, priorities, and internal strategies can adversely impact the company’s operations and outlook.
Happiest Minds has the benefit of being well-entrenched with its customers.
 It does not have long-term commitments with customers. Customers can terminate contracts before completion, negotiate adverse
terms of the contract or choose not to renew contracts. Any change in the contract nitty gritty from large clients like non-renewal of
contracts or higher discounts due to aggressive competition can impact the sustainability and scalability from such clients.
 The second and third waves of COVID cases in some parts of the world continue to lend uncertainty.
 Happiest Minds lacks domain expertise barring select areas and is the key focus area of investment. Inability to beef up domain
capabilities could be a key risk to growth in revenue.

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Happiest Minds Technologies Ltd.
Company profile:
Happiest Minds Technologies Ltd (Happiest Minds) is a technology solution provider which provides digital transformation and technology
services to clients globally. The company provides an end-to-end solution in the digital space. Its customer-centric focus aims to provide
strategically viable, futuristic, and transformative digital solutions. The company also offers solutions across the spectrum of advanced digital
technologies such as Robotic Process Automation (RPA), Software-Defined Networking/Network Function Virtualization (SDN/NFV), Big Data
and advanced analytics, Internet of Things (IoT), Cloud, Business Process Management (BPM) and security. Happiest Minds delivers services
across industry sectors such as Retail, Edutech, Industrial, BFSI, Hi-Tech, Engineering R&D, Manufacturing, Travel, and Media &
Entertainment.
As of 31 Dec 2020, Happiest Minds had 155 active customers and it has a global presence in countries like the US, the UK, Australia, Canada
and the Middle East with ~2,885 employees as its headcount.
Business overview
Key Business Units (BUs)
Digital Business Services (DBS)
Digital technologies help businesses change at a faster pace. The DBS unit offers digital modernization and transformation, which enhances
customer experience and productivity and lead to better business outcome. It provides digital application development and application
modernization with consulting and domain-led offerings such as digital roadmap, mindful design thinking, and migration of on-premises
applications to Cloud.
Product Engineering Services (PES)
The PES unit aims to transform the potential of digital by making the product secure and smart. Happiest Minds offerings extend across the
development lifecycle from strategy to final rollout while ensuring quality. The company embraces Cloud and a mobile friendly approach
along with an agile model that is supported by test automation to accelerate their time-to-market and build competitive advantages.

Infrastructure Management & Security Services (IMSS)

Happiest Minds IMSS offerings provide end-to-end monitoring and management capabilities and continuous support and managed security
services for mid-sized enterprises and technology companies. Its security offerings include cyber and infrastructure security, governance,

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Happiest Minds Technologies Ltd.
risk & compliance, data privacy and security, identity and access management and threat and vulnerability management. The company’s
infrastructure offerings include DC and hybrid Cloud services, workspace services, service automation (RPA, ITSM & ITOM), database and
middleware services and software defined infrastructure services.
Out of the above business units, PES alone accounts for 49.5% of the revenue while DBS and IMSS account for 24.8% and 21.5% of the
revenue respectively as on 31 Dec 2020.

(Source: Company, HDFC sec)

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Happiest Minds Technologies Ltd.
Partners

(Source: Company, HDFC sec)

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Happiest Minds Technologies Ltd.
Operating Metrics
Service Offerings (%)
Particulars FY19 FY20 Q1FY21 Q2FY21 Q3FY21
Digital infrastructure/Cloud 40.9 31.2 43.7 41.1 41.0
SaaS 28.6 29.4 23.6 24.6 21.6
Security solutions 10.2 14.9 7.6 7.4 8.7
Analytics/AI 9.1 11.6 12.1 13.5 14.4
IoT 8.4 9.8 9.3 10.5 10.9
Others 2.8 3.1 3.7 2.9 3.4
Total 100.0 100.0 100.0 100.0 100.0

Revenue by Industry (%)

Particulars FY18 FY19 FY20 Q1FY21 Q2FY21 Q3FY21
Edutech 18.0 21.3 21.3 27.0 27.0 24.9
Hitech 24.6 21.0 21.0 20.5 19.5 20.2
BFSI 17.9 18.2 17.5 17.4 16.3 17.4
Travel, Media &Entertainment TME 11.0 13.8 17.1 12.9 13.0 14.4
Retail 7.0 6.9 7.5 5.7 4.5 2.2
Industrial 6.2 8.1 7.0 6.4 6.9 7.0
Manufacturing 3.2 3.8 3.7 5.6 6.8 6.9
Others 12.3 6.9 4.9 4.6 6.0 7.0
Total 100.0 100.0 100.0 100.0 100.0 100.0

Project Type Mix %

Particulars FY18 FY19 FY20 Q1FY21 Q2FY21 Q3FY21
Fixed Price 18.4 16.8 19.0 18.8 19.3 22.2
Time and Material 81.6 83.2 81.0 81.2 80.7 77.8

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Happiest Minds Technologies Ltd.
Revenue by Geography (%)
Particulars FY18 FY19 FY20 Q1FY21 Q2FY21 Q3FY21
USA 73.5 75.5 77.5 77.3 77.3 72.2
India 11.7 11.9 11.9 10.9 10.9 13.4
UK 11.4 9.5 7.2 9.8 9.2 10.6
Others 3.4 3.1 3.4 2.0 2.6 3.8

Revenue by Business Units (%)

Particulars FY18 FY19 FY20 Q1FY21 Q2FY21 Q3FY21
DBS 31.5 30.1 26.8 24.6 25.1 24.8
IMSS 20.2 21.5 21.5 19.5 21.1 21.5
PES 43.0 46.5 49.4 50.6 51.2 49.5
Other Income 5.5 1.9 2.2 5.3 2.7 4.2

Digital and Agile (%)

Particulars FY19 FY20 Q1FY21 Q2FY21 Q3FY21
Digital 97.2% 96.9% 96.3% 97.1% 96.6%
Agile 71.1% 87.9% 90.2% 92.8% 92.8%

Billing Mix (%)

Particulars FY18 FY19 FY20 Q1FY21 Q2FY21 Q3FY21
Onsite 21.4 22.0 22.5 21.0 21.9 19.0
Offshore* 78.6 78.0 77.5 79.0 78.1 81.0

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 Happiest Minds Technologies Ltd.
Client Concentration (Nos)
Particulars FY18 FY19 FY20 Q1FY21 Q2FY21 Q3FY21
US$ 10mn+ 0 1 1 1 1 1
US$ 5mn- 10mn 2 2 0 1 0 2
US$ 3mn- 5mn 2 1 9 4 6 5
US$ 1mn- 3mn 12 17 15 17 17 17
Total 16 21 25 23 24 25
Active Customers 173 163 157 148 152 155

Headcounts
Particulars FY18 FY19 FY20 Q1FY21 Q2FY21 Q3FY21
Headcounts 2253 2462 2666 2658 2721 2885
Utilization-% 68.4 77.3 76.9 74.9 78.7 81.6
Offshore-% 95.3 94.6 95.4 95.3 95.1 95.0
Onsite--% 4.7 5.4 4.6 4.7 4.9 5.0
Attrition--% 0.0 25.2 18.7 16.0 14.1 13.1
DSO 80 91 83 83 77 77

Peer Comparison
Sales EBITDA PAT ROE-% P/E (x)
Company, Rs in Cr Mkt Cap, Cr
FY21E FY22E FY23E FY21E FY22E FY23E FY21E FY22E FY23E FY21E FY22E FY23E FY21E FY22E FY23E
Happiest Minds 9516.8 754.2 951.3 1158.0 181.8 216.9 262.9 161.6 181.0 214.3 29.1 25.6 24.2 58.9 52.6 44.4
Mindtree 33845.9 7968.0 9264.0 10685.0 1383.0 1673.0 1877.0 1157.0 1359.0 1511.0 29.7 28.6 26.7 29.2 24.9 22.4
Persistent Sys 15537.9 4187.0 4968.0 5778.0 488.0 617.0 783.0 431.0 555.0 687.0 17.1 19.4 20.7 34.6 26.9 21.7
Cyient 7689.0 4132.0 4574.0 5175.0 416.0 555.0 663.0 372.0 427.0 527.0 13.5 13.9 15.9 20.7 18.0 14.6
Zensar Tech 6083.4 3718.0 4035.1 4474.8 512.7 552.8 632.1 359.4 409.6 464.9 16.5 17.3 17.9 16.9 14.8 13.1

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 Happiest Minds Technologies Ltd.
Financials (Consolidated)
Income Statement Balance Sheet
(Rs Cr) FY19 FY20 FY21E FY22E FY23E As at March FY19 FY20 FY21E FY22E FY23E
Net Revenues 590.4 698.2 754.2 951.3 1158.0 SOURCE OF FUNDS
Growth (%) 27.5 18.3 8.0 26.1 21.7 Share Capital 6.0 8.8 29.4 29.4 29.4
Operating Expenses 535.5 601.1 572.4 734.4 895.1 Reserves -72.0 256.5 526.8 678.5 856.0
EBITDA 54.8 97.1 181.8 216.9 262.9 Shareholders' Funds -66.1 265.3 556.2 707.8 885.4
Growth (%) -394.6 77.1 87.2 19.3 21.2 Minority Interest 0.0 0.0 0.0 0.0 0.0
EBITDA Margin (%) 9.3 13.9 24.1 22.8 22.7 Long Term Debt 38.1 18.6 66.9 46.9 36.9
Depreciation 24.8 20.2 20.5 23.3 30.3 Net Deferred Taxes 0.0 0.0 0.0 0.0 0.0
EBIT 30.1 76.9 161.3 193.6 232.6 Long Term Provisions & Others 9.4 12.6 13.2 13.8 14.5
Other Income 11.5 16.0 29.0 32.3 34.7 Total Non Current Liab 47.5 31.2 80.1 60.8 51.5
Interest expenses 15.9 8.0 6.6 9.2 7.6 Short-Term Borrowings 75.9 87.3 65.9 60.9 52.4
PBT 25.6 84.9 183.7 216.8 259.7 Trade Payables 28.8 34.4 37.2 46.9 57.1
Tax -1.2 1.9 22.0 35.8 45.5 Other Current Liab & Provisions 327.3 89.9 82.8 76.5 74.0
RPAT 14.2 71.7 161.6 181.0 214.3 Total Current Liabilities 432.0 211.7 185.9 184.3 183.6
Growth (%) -163.2 404.6 125.4 12.0 18.4 Total Source of Funds 413.5 508.2 822.2 952.9 1120.4
EPS 1.0 4.9 11.0 12.3 14.6 APPLICATION OF FUNDS
Net Block & Goodwill 61.3 38.0 122.5 189.2 226.9
Other Non-Current Assets 18.3 25.0 26.3 27.6 29.0
Total Non Current Assets 79.5 63.0 148.8 216.8 255.9
Inventories 0.0 0.0 0.0 0.0 0.0
Trade Receivables 129.3 114.9 124.0 156.4 190.3
Cash & Equivalents 124.4 126.9 366.2 387.2 471.9
Other Current Assets 80.3 203.4 183.3 192.6 202.3
Total Current Assets 334.0 445.1 673.5 736.1 864.5
Total Application of Funds 413.5 508.2 822.2 952.9 1120.4

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Happiest Minds Technologies Ltd.
Cash Flow Statement Key Ratios
(Rs Cr) FY19 FY20 FY21E FY22E FY23E Particulars FY19 FY20 FY21E FY22E FY23E
Reported PBT 13.0 73.6 183.7 216.8 259.7 Profitability Ratio (%)
Non-operating & EO items 23.2 9.4 -3.1 -24.7 -34.7 EBITDA Margin 9.3 13.9 24.1 22.8 22.7
Interest Expenses 15.9 8.0 6.6 9.2 7.6 EBIT Margin 5.1 11.0 21.4 20.4 20.1
Depreciation 24.8 20.2 20.5 23.3 30.3 APAT Margin 2.4 10.3 21.4 19.0 18.5
Working Capital Change -15.9 7.0 -10.2 -51.5 -46.0 RoE - 27.0 29.1 25.6 24.2
Tax Paid -3.4 -6.1 -22.0 -35.8 -45.5 RoCE - 28.0 26.9 25.0 23.9
OPERATING CASH FLOW ( a ) 57.6 112.2 175.4 137.2 171.4 Solvency Ratio (x)
Capex -0.7 -0.4 -105.0 -90.0 -68.0 Net Debt/EBITDA 2.1 1.1 0.7 0.5 0.3
Free Cash Flow 56.9 111.8 70.4 47.2 103.4 Net D/E -1.7 0.4 0.2 0.2 0.1
Investments -1.4 -77.2 0.0 0.0 0.0 PER SHARE DATA
Non-operating income 1.8 3.8 9.0 17.3 19.7 EPS 1.0 4.9 11.0 12.3 14.6
INVESTING CASH FLOW ( b ) -0.3 -73.7 -96.0 -72.7 -48.3 CEPS 2.7 6.3 12.4 13.9 16.7
Debt Issuance / (Repaid) -51.6 -14.5 38.3 -25.0 -18.5 BV -4.5 18.1 37.9 48.2 60.3
Interest Expenses -15.9 -8.0 -6.6 -9.2 -7.6 Dividend 0.0 0.0 0.0 2.0 2.5
FCFE -10.6 89.3 102.1 13.1 77.3 Turnover Ratios (days)
Share Capital Issuance -1.6 4.4 110.0 0.0 0.0 Debtor days 79.9 60.1 60.0 60.0 60.0
Dividend 10.3 4.8 0.0 -29.4 -36.7 Inventory days 0.0 0.0 0.0 0.0 0.0
FINANCING CASH FLOW ( c ) -58.8 -13.3 141.7 -63.5 -62.8 Creditors days 17.8 18.0 18.0 18.0 18.0
NET CASH FLOW (a+b+c) -1.5 25.1 221.1 1.0 60.3 VALUATION (x)
P/E 669.7 132.7 58.9 52.6 44.4
P/BV -144.1 35.9 17.1 13.4 10.7
EV/EBITDA 174.8 99.2 51.5 43.1 35.2
EV / Revenues 16.2 13.8 12.4 9.8 8.0
Dividend Yield (%) 0.0 0.0 0.0 0.3 0.4
Dividend Payout (%) 0.0 0.0 0.0 16.2 17.1
(Source: Company, HDFC sec)

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Happiest Minds Technologies Ltd.
Stock Price Chart (Since Listing)

(Source: Company, HDFC sec)

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 Happiest Minds Technologies Ltd.
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