IT firm Happiest Minds saw a significant increase in its banking, financial services, and insurance (BFSI) vertical, with its contribution rising by 540 basis points. However, the firm’s US contribution decreased by 250 basis points in the recently concluded quarter. One basis point equals one-hundredth of a percentage point.
Executive Vice Chairman Joseph Anantharaju explained that acquisitions in the first quarter affected the BFSI sector and the US geography.
Happiest Minds announced its Q1 earnings late Monday night and noted that it acquired Aureus and PureSoftware during this period.
“Both these acquired firms are strong in financial services. While PureSoftware is focused more on banking and financial services, Aureus is on insurance”, added Anantharaju.
“These two companies have large BFSI customers. So it’s really adding to our domain depth and to the type of customers that we have. If you look at the Americas, there are two things out there. On an absolute basis, America has grown and it’s grown by 6.9% quarter on quarter, even though the share (in the total revenue) has gone down.”
Anantharaju highlighted that PureSoftware, which generates significant revenue from the APAC (Asia Pacific) region, impacted the overall figures. The company now derives around 2.1% of its revenue from this region and receives 1-2% from Africa. Aureus contributes some revenue from Africa and operates in Hong Kong, Singapore, and Malaysia.
These acquisitions have influenced the company’s margins and profits for Q1 of FY24. According to Venkatraman Narayanan, MD, and CFO, the firm’s net profit fell by 29.1% to Rs 51 crore due to non-recurring expenses related to the acquisitions.
Revenue increased by 11.2% sequentially to Rs 463 crore for the quarter. Year-on-year, revenue grew by 18.7%. However, the margin decreased by 60 basis points to 23.9%, compared to 24.5% in the last quarter of FY24.
The acquisitions also increased the company’s onsite employee presence. Onsite employees comprise 6.2% of the total workforce in Q1, up from 4.1% in Q4 of FY24. The total headcount surged to 6,599 by the end of Q1, an increase of 1,431 employees.
