Shares of Happiest Minds Technologies broke a six-day losing streak on Tuesday by gaining 7.2 percent to Rs. 884.95 apiece, the biggest intraday gain in almost five months.
After reaching a 52-week high of €1,240 on March 15, 2022, the stock is in a downtrend and has lost 29.60 percent of its value to date. In December alone, the stock fell nearly 7 percent.
Happiest Minds Technologies is a Bangalore-based IT services company providing end-to-end solutions in the digital space. The stock went public on September 17, 2020, making it one of the most successful IPOs to date.
The stock made a strong debut on the stock exchanges €351 a piece compared to the issue price of €166. It ended the first day up 123.5 per cent at Rs. 371. The IPO drew a great response from investors as it attracted nearly 151 subscriptions.
Taking into account the current market price, the share is listed 425 percent above its issue price. Within 10 months of its listing, the stock rose 326 percent to an all-time high of €1,580.
Last week the company reported net profit of Rs. 57.58 crore for the December quarter, up 17.7 percent yoy; however, net income fell 3.1 percent sequentially.
The total income was €374.7 crore for Q3 FY23, up 28.2 percent year-on-year and 4.3 percent quarter-on-quarter. Currency-neutral sales increased 2.8 percent sequentially and 22.6 percent year-on-year.
EBITDA has increased to Rs. 97.26 crore, a growth of 3.1 percent on a QoQ basis and 26.5 percent on a YoY basis.
Happiest Minds had 4,611 employees at the end of the December quarter, 30 net additions. The turnover rate was 20.9 percent (12-month lag). It had 230 customers, with nine additions during the just-completed third quarter.
Happiest Minds Technologies stock price chart.
Meanwhile, the company said it was looking for the “right companies” to acquire in the digital space and exploring opportunities. Such an acquisition could be driven by several considerations, including increasing footprint, acquiring new skills, or for a major client in a particular industry.
According to the company’s Q3 figures, brokerage firm KR Choksey kept its buy call on the stock with a price target of €1,158 apiece, signaling a 40 percent up move from the stock’s previous close.
“We believe that the recent intake of freshmen – (the December intake), continued investments in expanding Infacility across India, particularly in Bangalore, Noida and Bhuvneshwar, together with a modest improvement on the supply side, will reduce the cost of subcontracting which will be partially offset by wage increases, and higher intake of freshmen (which will drag occupancy rates down) will keep margins under control in the near term,” said KR Choksey.
The brokerage firm expects strong transaction momentum across all verticals, a full focus on digital business, particularly in the analytics and cybersecurity segment, along with the client-centric approach to support growth in the near future.
02 analysts polled by MintGenie have, on average, a buy rating for the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage firms and not of MintGenie.
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Initial Release: Jan 24, 2023 3:51 PM IST
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