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Revenue
₹550 Cr
verified against source
Revenue YoY
18.5%
reported change
EBITDA
₹124 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Happiest Minds delivered a strong Q1 FY26 with 17.5% YoY constant currency growth and EBITDA margin of 21.4%, well within the guided 20-22% range. Revenue reached ₹580 crore, up 18.5% YoY, while EBITDA stood at ₹124 crore with 12.9% sequential growth. PAT grew 12% YoY to ₹57 crore. Growth was broad-based, led by GenAI (82% YoY), IMS, and verticals like BFSI and healthcare. Management reiterated double-digit growth guidance for FY26 and expects H2 to be stronger despite Q3 seasonality. Key risks include elevated attrition (18.2%), potential margin pressure from wage hikes in Q2, and macroeconomic uncertainty in the US market.
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Guidance to track
- Management expects to deliver double-digit growth in constant currency for the full fiscal year, with H2 expected to be stronger than H1.
- EBITDA margin is guided to remain in the 20-22% range for FY26, despite wage hikes and continued investments.
- The GenAI business unit, which broke even at operating margin level in Q1, is expected to achieve profitability levels comparable to the TDES segment by year-end or early next year.
- The flagship unified banking platform ARTA is expected to grow revenues by 20-25% in the current fiscal year.
Risks flagged
- US revenues saw a sequential decline due to completion of a large program and a customer pausing programs, raising concerns about near-term growth in the largest market.
- Attrition rose to 18.2%, driven by high demand for digital and AI skills, which could pressure margins and require higher compensation adjustments.
- Management flagged planned pay increases in Q2 as a cost headwind, which may compress margins unless offset by efficiency gains and currency benefits.
- DSO increased to 91 days from 87 days, partly due to billing system integration with the Middle East entity acquired, which could impact cash flows if not resolved quickly.
Key quotes
- Our EBITDA this quarter stood at 124 crores, achieving a standout 12.9% sequential growth, well ahead of most peers and industry trends.
- Our GenAI business unit led the way this quarter with 12.7% sequential and 82% year on year growth, while showing significant traction with multiple pilots scaling into long term engagements.
- We are at 21.4% already. So 20 to 22% is a story of maintain and grow.
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