A broker has initiated a 'Buy' rating on Happiest Minds with a target price of ₹560, as reported by The Hindu BusinessLine. The current market price stands at ₹378.75, indicating potential upside of approximately ₹181.25 from current levels. The broker's recommendation is based on strong revenue growth prospects and stable margin performance, with the revised target price reflecting FY28E EPS estimates.
Happiest Minds reported Q4FY26 revenues of ₹604.10 crore, which fell short of estimates of ₹645.50 crore but showed growth of 2.8% quarter-on-quarter and 10.9% year-on-year. In USD terms, revenues declined 1.1% q-o-q to $65.0 million. The company's EBIT margin came in at 13.6% for Q4-FY26, declining 90 basis points quarter-on-quarter, while PAT for the quarter stood at ₹6.12 crore, representing a 51.8% quarter-on-quarter and 32.5% year-on-year increase. According to The Hindu BusinessLine, the broker's estimate for EBIT margin was 15.6% for the quarter.
For the full financial year FY26, Happiest Minds achieved INR revenues of ₹231.50 crore, up 12.3% year-on-year, while USD revenue stood at $265.8 million, up 9.1% year-on-year. The EBIT margin for the full year stood at 13.6%, representing an improvement of 70 basis points year-on-year. PAT for the full year reached ₹21.26 crore, marking an 8% year-on-year growth. The margin remained stable at 17.5% for the full year, aided by improved utilisation and operational efficiency, though continued AI investments may keep near-term profitability range-bound.
The company's margin remained stable at 17.5% for Q4-FY26, aided by improved utilisation and operational efficiency, though continued AI investments may keep near-term profitability range-bound. Management expects margin improvement of about 100 basis points over time, targeting an operating margin range of 17.5-18.5%. According to The Hindu BusinessLine, the broker expects Revenue/EBIT/PAT to respectively expand at a CAGR of 16.5/21.2/25.6% over FY26–FY29E. Execution on AI monetisation, platform scaling-up and margin discipline will remain critical for sustaining growth momentum.
The broker has revised the target price to ₹560 from the earlier ₹620, based on FY28E EPS estimates. As reported by The Hindu BusinessLine, execution on AI monetisation, platform scaling-up and margin discipline will remain critical for sustaining growth momentum. The company's focus on AI-related services and operational efficiency improvements positions it well for future growth, though continued AI investments may impact near-term profitability. This revised target price reflects the broker's updated assessment of the company's growth prospects and margin trajectory.
