After reaching a 52-week high of ₹1,240 on March 15, 2022, the stock has been on a downward trend and has lost 29.60 percent of its value to date. In December alone, the stock fell almost 7 percent.
Happiest Minds Technologies is a Bangalore-based IT services company that provides end-to-end solutions in the digital space. The stock got listed on the exchanges on September 17, 2020, making it one of the most successful IPOs to date.
The stock made a strong debut on the bourses at ₹351 apiece, compared to the issue price of ₹166. It finished the first day with a listing gain of 123.5 percent at Rs. 371. The IPO received a strong response from investors, as it was subscribed to nearly 151 times.
Taking the current market price into consideration, the stock is trading 425 percent above its issue price. Within 10 months of its listing, the stock soared 326 percent to hit an all-time high of ₹1,580.
Last week, the company reported a net profit of Rs. 57.58 crore for the December quarter, an increase of 17.7 percent year-on-year; however, sequentially, the net profit fell 3.1 percent.
Total income stood at ₹374.7 crore for Q3 FY23, up 28.2 percent YoY and 4.3 percent quarter-on-quarter. Revenue in constant currency grew 2.8 percent sequentially and 22.6 percent year-on-year.
The EBITDA has increased to Rs. 97.26 crore, a growth of 3.1 percent on a QoQ basis and 26.5 percent on a YoY basis.
Happiest Minds had 4,611 employees at the end of the December quarter, with a net of 30 additions. The attrition rate stood at 20.9 percent (12-month trailing). It had 230 clients, with nine additions during the just-concluded third quarter.
Meanwhile, the company said it is looking for the "right companies" to acquire in the digital space and scouting for opportunities. Such an acquisition could be driven by several considerations including augmenting presence, gaining new competency, or for a large client in a particular vertical.
Following the company's Q3 numbers, brokerage firm KR Choksey maintained its "buy" call on the stock with a target price of ₹1,158 apiece, signalling an upside of 40 percent from the stock's previous closing price.
"We believe that the recent intake of freshers - (the December intake), continuous investments in infacility addition across India, especially in Bangalore, Noida, & Bhuvneshwar, along with marginal improvement in the supply side, lower sub-contracting costs, which will be partially offset by wage hikes, and a higher intake of freshers (which will drag the utilisation rate down), will keep margins under check in the near term," said KR Choksey.
The brokerage expects the strong deal momentum across verticals, a full focus on digital business, especially in the analytics and cyber security segment, along with the clients' centric approach, will aid growth over the near term.
02 analysts polled by MintGenie on average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
