Happiest Minds Technologies expects to deliver double-digit growth in FY26 and maintain its operating margin in the range of 20-22%, buoyed by strong momentum in key verticals such as banking, financial service, and insurance (BFSI) and healthcare, and continued traction in generative AI opportunities, MD & CFO Venkatraman Narayanan told FE.
In the fourth quarter of FY25, the IT services company reported a 30.5% year-on-year rise in revenue to Rs 544.57 crore, driven by healthy deal traction in segments like healthcare and BFSI as well as investments in emerging technologies like GenAI. However, net profit fell 52.76% to Rs 34 crore due to a one-time exceptional cost.“We signed up this customer in Q2, ramped up in Q3, and generated around $1-1.5 million in revenue.
This customer helps upskill minority and underprivileged students and assists them in finding jobs,” said co-chairman & CEO Joseph Anantharaju.“Much of the funding for such programs comes from the government. However, due to challenges with new dispensation customers, both government funding and investor contributions were affected. As a result, we were unable to receive payments for the services we rendered in Q3, leading us to stop work and absorb the impact.”For the full fiscal, Happiest Minds reported a revenue of Rs 2,060.84 crore, up 26.85% over the previous year. Net profit for the year declined 25.66% to Rs 184.66 crore. EBITDA for FY25 stood at Rs 462.24 crore, with a margin of 21.4%, in line with the company’s guidance.
The company sees strong tailwinds in the BFSI and healthcare verticals, which are expected to drive growth in FY26. The edtech segment, on the other hand, continues to face headwinds. GenAI continues to be a key growth area for Happiest Minds. “If you take Gen AI, last year was when we saw more of the smaller POCs and deals. What we’re seeing in the last couple of months is some of these moving into larger implementations.,” said Anantharaju.
He also noted that tariff-related uncertainty in the US led to some caution among customers, especially in manufacturing and retail. “We didn’t see any cancellations or client visits being cancelled due to this. What we did notice is that customers, particularly in manufacturing and, to a lesser extent, retail CPG, became more cautious and adopted a wait-and-watch approach,” he added.
On whether GenAI is leading to pricing pressures or changes in deal tenures, Narayanan noted that the effects are more complex. “It’s a risk-reward model is what contracting models really stand for. Not so much as risk-reward and ownership,” he said. He added that while automation tools like GenAI are improving efficiencies, the corresponding pricing changes depend on the nature of the engagement, whether time-and-material (T&M) or fixed price.
On hiring, the company is currently operating at an utilisation rate of 77%, slightly below its ideal target. “Our ideal number is 80 or 81. It also will give us a little bit of leverage from a margin perspective. So, that would be the first preference actually,” said Anantharaju.In Q4, Happiest Minds added 14 new clients, bringing its total to 281. Key deal wins included an AI-powered end-user chat platform for a global market research agency, connected product development for a US manufacturer, and risk consulting for a West Asian bank.