Happiest Minds’ Operating Margin Rises to 18.5% as Revenue Grows 12.5%
Key Facts
Happiest Minds Technologies reported its consolidated results on November 2 for the second quarter of fiscal 2027, ended September 30, 2026, recording revenue of 64,543 lakh rupees. Revenue rose 12.5% from the same period a year earlier and 2.7% from the first quarter of the fiscal year. In constant currency, growth was 6.8% year over year and 2.4% quarter over quarter, slower rates than the growth calculated in rupees. Operating revenue was $67.4 million, up 3.6% year over year and 1.8% from the previous quarter. The chief executive said the results reflected "continued strength in customer relationships and a focus on disciplined execution."
The operating margin rose to 18.5%, compared with 17.0% in the year-ago quarter and 17.5% in the first quarter of fiscal 2027. Operating margin value increased 22.4% year over year and 9.6% quarter over quarter, according to the company’s investor presentation. Earnings before interest, taxes, depreciation and amortization totaled 14,204 lakh rupees, up 18.1% year over year. The margin on those earnings reached 21.3% of revenue, compared with 20.2% a year earlier, although it was 21.7% in the previous quarter. The figures place the improvement in operating margin alongside annual growth in operating earnings, with a slight decline in the EBITDA margin from its quarterly level.
Net profit was 6,219 lakh rupees, up 15.1% from the second quarter of fiscal 2026 but down 8.0% from the first quarter of fiscal 2027. The net profit margin fell to 9.3% from 10.4% in the previous quarter, while it was 9.1% in the year-ago period. The company said the quarter included an exceptional item of 398 lakh rupees related to the proposed merger with ITC Infotech. The company calculates adjusted earnings by adding back exceptional items and amortization of intangible assets. For the first half, adjusted profit after tax rose 19.0% to 15,963 lakh rupees, compared with 13,415 lakh rupees in the corresponding period of fiscal 2026.
The company added 7 clients during the quarter, bringing its total client base to 311 as of September 30, 2026. It had 6,466 employees on the same date, and its resource utilization rate rose to 81.8% from 80.9% in the previous quarter. The 12-month rolling attrition rate also fell to 14.3%, compared with 15.4% in the first quarter. These indicators reflect an expanded client base and improved resource utilization alongside a lower employee attrition rate. The disclosure did not directly link the improvement in operating margin to utilization or attrition, while the chief executive attributed the results to strong customer relationships and disciplined execution.
Happiest Minds’ announced contracts included its selection as an AI-led strategic technology partner for a digital asset management platform, with the aim of establishing and expanding its global center in Bengaluru. A U.S. skincare and beauty company also selected it as a managed services partner under a multi-year agreement. These contracts add to the quarter’s announcements and indicate company activity in AI technologies and managed services. The statement did not disclose the value of the two agreements or their expected contribution to revenue. For the six months ended September 30, 2026, revenue was 1,27,349 lakh rupees, up 13.4% year over year, while constant-currency revenue increased 6.7%.
The board declared an interim dividend of 3.05 rupees per share for fiscal 2026-2027. The company set November 6, 2026, as the record date for determining eligibility for the dividend. In its second-quarter investor presentation, the company said the merged entity is targeting annual revenue of $1 billion by fiscal 2028. The target places the quarterly and first-half results within a stated trajectory for the entity following the proposed merger with ITC Infotech, which was linked to an exceptional item in the quarter. The disclosure did not specify another date in the information reported here for an update on the merger’s progress or details on implementing the revenue target.