Happiest Minds Technologies Limited

Technology — Information Technology Services · NSE

₹338.00+₹4.85 (+1.46%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by moderate debt load, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Constructive picture on fundamentals. Profitability, leverage and growth metrics are broadly healthy on this snapshot. That said, valuation should still be checked against direct sector peers (not just the generic P/E bands used here) before treating this as a buy signal.

Understanding the Business

Company site ↗

The 60-second version of Happiest Minds Technologies Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Happiest Minds Technologies Limited, together with its subsidiaries, provides information technology (IT) solutions and services in India, the Americas, Australia, Europe, Asia, the Middle East, and Africa.

IndustryInformation Technology Services

SectorTechnology

Employees6,500

Annual revenue₹2,315 Cr

How does it make money?

Turns over ₹2,315 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 6,500 employees supports ₹35.6 lakh of revenue a year, the signature of a people-led business.

EBITDA margin20.0%

Net margin9.2%

Revenue / employee₹35.6 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?Some evidence

ROCE of 17.2% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE17.2%

ROE13.3%

Peer median ROE32.0%

What is the outlook?

7 analysts covering the stock expect revenue to grow about 12.5% and earnings to grow about 14.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.5%

Est. earnings growth+14.9%

Analysts7

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +62% while net margin moved -43% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+62%

Margin effect-43%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Revenue CAGR of 17.4% — compounding well above nominal GDP
✗ Profit has declined at 2.7% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

55/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

61/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

22.8x

3Y Median

42.1x

40 monthly readings · mean 41.0x · range 22.0x–58.0x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 46% below its 3y median of 42.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 38% above the peer median of 16.5x.

vs. its own history

Cheap

42.1x median over 40 months · -46%

vs. sector peers

Expensive

16.5x median of 4 peers · +38%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

22.8x

P/B

2.87x

EV/EBITDA

13.9x

PEG

1.25

Dividend Yield

2.16%

What's Good / What's Bad

🟢 What's Going Well3

Cash generation is improving
Free cash flow is up 275% over 3 years.
Valuation below its historical average
At 22.8x the stock trades 46% below its own median of 42.1x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 26.0% to 20.0% over 3 years.
Debt is rising
Total debt is up 179% over 3 years — worth checking what it funded.
Return on equity is falling
ROE has dropped from 27.5% to 12.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 31.2% to 17.2% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 83% against revenue growth of 62% — customers are taking longer to pay.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 179% over 3 years, from ₹534 Cr to ₹1,487 Cr.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.0 points, from 26.0% to 20.0%.
🟡Receivables growing faster than salesFinancial
Receivables up 83% against revenue up 62% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 46% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 26.0% to 20.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 83% against revenue up 62%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 38% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 27.5% to 12.6%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 13% a year✓ 17.4% CAGR
Latest reported year was 14.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 18%✓ 20.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✓ 3.9x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹254 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

9 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 5 neutral · 0 weak

Market Cap

₹5,079 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.8x

Fair

Fairly valued against the generic band

P/B Ratio

2.87x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹14.8

Profitable

Profitable on a per-share basis

ROE

13.3%

Moderate

Moderate capital efficiency

ROCE

17.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.99x

Moderate

Moderate leverage

Revenue Growth (YoY)

14.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

18.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

2.16%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹254 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹338

P/E (Forward)

15.6x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

15.1%

Good

Healthy core-business profitability

Net Margin

9.3%

Average

Average bottom-line conversion

Current Ratio

1.66

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.08

Defensive

Steadier than the market

52W Range Position

17%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

313.3 / 357.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

72.9

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,429 Cr	₹1,625 Cr	₹2,061 Cr	₹2,315 Cr	+17.4%
EBITDA	₹371 Cr	₹421 Cr	₹443 Cr	₹463 Cr	+7.6%
EBITDA Margin	26.0%	25.9%	21.5%	20.0%	—
PAT (Net Profit)	₹231 Cr	₹248 Cr	₹185 Cr	₹213 Cr	-2.7%
EPS	₹16.01	₹16.73	₹12.26	₹14.11	-4.1%
ROE	27.5%	16.8%	11.7%	12.6%	—
ROCE	31.2%	22.4%	16.5%	17.2%	—
Total Debt	₹534 Cr	₹512 Cr	₹1,244 Cr	₹1,487 Cr	+40.7%
Free Cash Flow	₹68 Cr	₹202 Cr	₹225 Cr	₹254 Cr	+55.4%

🟢 Revenue has grown at 17.4% a year over 3 years.

🟢 EBITDA has grown at 7.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 26.0% to 20.0% over 3 years (-6.0 pts).

🔴 PAT (Net Profit) has shrunk at 2.7% a year over 3 years.

🔴 EPS has shrunk at 4.1% a year over 3 years.

🔴 ROE has fallen from 27.5% to 12.6% over 3 years (-15.0 pts).

🔴 ROCE has fallen from 31.2% to 17.2% over 3 years (-14.0 pts).

🔴 Total Debt has grown at 40.7% a year over 3 years.

🟢 Free Cash Flow has grown at 55.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,625 Cr

Total Liabilities

₹1,936 Cr

Total Debt

₹1,487 Cr

Cash & Equivalents

₹120 Cr

Operating Cash Flow

₹261 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

8.3%

Insider Holding

46.0%

Corporate Actions

Next Earnings

28 Oct 2026

Dividend Rate

₹7.3

Ex-Dividend Date

17 Jul 2026

Analyst Consensus

Recommendations

6 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹422.14

+24.9% vs CMP

Target Range

₹353 – ₹600

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

5 mixed1 general

Happiest Minds Technologies to host Q1FY27 earnings call on July 28

scanx.trade, 13 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Happiest Minds Technologies Q3 Results

Livemint, 16 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Happiest Minds Technologies Ltd. (HAPPSTMNDS) Share Price Rises 5.93% as It Clears Mid Cap Threshold

Univest, 21 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Happiest Minds Technologies announces merger with ITC Infotech to create a scaled, AI First Global Technology Services Enterprise with US$ 1 billion Revenue by FY28 - HappiestMinds

Happiest Minds, 31 AugM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Happiest Minds Technologies shares fall 6% as reports suggest ITC Infotech may buy promoter stake

The Economic Times, 27 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Compare with

Equitymaster, 17 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

🟡Business QualityAdequate11.8/20

🟢Financial HealthStrong13.4/20

🟡GrowthModest9.3/20

🟡ProfitabilityModerate7.1/15

🟢ValuationAttractive11/15

🟢RiskLow6.7/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 13% a year17.4% CAGR
✓EBITDA margin holds above 18%20.0%
✗Debt / EBITDA falls below 3x3.2x
✓Interest cover stays above 3x3.9x
✓Free cash flow remains positive₹254 Cr