by Prashant Marathe | EduInvesting.in | 23 May 2025
🧠 At a Glance:
| Metric | FY25 | FY24 | YoY |
|---|---|---|---|
| 🧾 Revenue | ₹2,160 Cr | ₹1,710 Cr | +26.4% |
| 💰 Net Profit | ₹184 Cr | ₹248 Cr | -25.7% |
| 💹 Adjusted PAT | ₹254.75 Cr | ₹256.61 Cr | -0.7% |
| 🧮 Adjusted EPS | ₹16.92 | ₹17.04 | ~flat |
| 📍 CMP | ₹608 (+10% today) |
📢 Revenue up. Margins stable. Profit fell… but market loved the commentary, AI wins, and dividend.
🧪 Segment Check: What’s Working?
- 💻 Digital Product Engineering + GenAI
- 🏥 Healthcare, BFSI, Retail verticals driving growth
- 🌍 North America + Middle East = expansion zones
- 🧠 Utilization at 77.4%, hiring in pause mode (attrition 16.6%)
💰 Dividend:
- ✅ Final Dividend ₹3.5/share (face value ₹2)
- 💵 Total payout = ₹54 Cr
- 📉 Yield ≈ 0.6% (not high, but welcome)
🧮 Forward Value Estimate
| Metric | Value |
|---|---|
| EPS (Adjusted) | ₹16.92 |
| CMP | ₹608 |
| P/E | ~35.9x |
Assume 15% CAGR EPS → ₹22 in FY27
At 35x = ₹770 FV (2-year target)
📈 Upside = ~26.6%
➡️ Not undervalued, but not overheated
📊 Could go sideways till Q1FY26 clarity
📉 Why Was PAT Down 25%?
- ❌ One-time bad debt write-off: ₹12 Cr
- 💸 Higher amortization on GenAI assets
- 👷 Sales + hiring costs for expansion
- 🧾 High interest cost on acquisition debt
Adjusted EPS neutralizes all this.
🔍 Balance Sheet Breakdown (YoY)
| Item | FY25 | FY24 |
|---|---|---|
| Equity | ₹1,895 Cr | ₹1,812 Cr |
| Total Assets | ₹8,232 Cr | ₹7,806 Cr |
| Debt | ₹3,591 Cr | ₹4,684 Cr |
| Finance Cost | ₹91.1 Cr | ₹39.8 Cr |
| Free Cash Flow | Negative | Positive |
🧯 Yes, debt reduced, but still over ₹3,500 Cr
🧨 Interest burden doubled
🪫 FCF strained due to receivables + CapEx
🧠 EduInvesting Take
This is not just an IT company. This is a “Digital Born + AI Embedded” IT stock.
Happiest Minds may never post Infosys-size numbers, but it’s leaner, focused, and growing faster.
But be warned:
“Every earnings call says GenAI. But only few deliver GenROI.”
So far? Happiest Minds is delivering:
✅ Real use cases
✅ Strategic wins
✅ Margin consistency
But… still waiting for a full AI monetization moment.
🧨 Risks & Red Flags
| 🔍 Risk | Impact |
|---|---|
| 💸 High P/E | Any EPS miss = 10–15% correction |
| 🔁 Client churn | 14 new clients added, but churn not disclosed |
| 🧾 Working capital | Receivables stretch visible |
| ⚠️ Revenue flat QoQ | Just 1.1% growth in constant currency |
| 📉 FCF risk | Negative in FY25 |
🧪 Final Verdict: AI-Infused, Margin-Focused, Slightly Expensive
“This isn’t a bubble IT stock. It’s an espresso shot of digital + AI. High P/E but clean brew.”
📉 CMP ₹608 = rich
📈 ₹550–₹580 = value entry
📊 ₹750–₹800 = 2-year bull case
💡 Verdict: Hold if you own. Add on dips. Watch Q1FY26 like a hawk.
Tags: Happiest Minds Q4 FY25 results, EPS growth, GenAI IT services, AI-led IT companies India, EduInvesting analysis, Happiest Minds dividend, P/E valuation, digital transformation stocks, Q4 results explained
