Happiest Minds Technologies stock under pressure after Q1 PAT declines to Rs36cr

Happiest Minds Technologies recorded a net profit of Rs35.73cr in the quarter ending June 2021 (Q1FY22) declining by 28.8% yoy and 0.9% qoq. The company's revenues stood at Rs331.52cr in the quarter under review, however, rising by 41.4% yoy and 9.6% qoq.

Venkatraman N, MD & CFO, Happiest Minds Technologies talking on the financials said, “We have begun the fiscal on a solid footing with good growth and performance. Our operations and delivery remain resilient in the face of supply-side pressures and the pandemic situation. Our financials this quarter has an exceptional expense on account of fair valuation of warrant liability in our balance sheet.

The original liability represented the probable future payout obligation basis growth and profitability of PGS Inc. Fair valuation of the original liability basis performance of the acquired asset, and changes, either debit or credit, must be routed through the P&L. Basis increasing probability of payout on account of performance  we have fair revalued the liability leading to an exceptional expense of Rs6.1cr."

The MD added, "Our improving profitability means higher effective income-tax. Compared to the same quarter previous year wherein we had a significant tax credit by accounting for ‘deferred tax asset’, this quarter we have a full charge or expenses in line with our profits."

Meanwhile, Joseph Anantharaju, Executive Vice Chairman, Happiest Minds Technologies said, “With our positioning in the market as a go to digital partner and the demand environment remaining buoyant, we have been able to record a good performance in this quarter. Our net headcount addition was strong as we onboarded 310 Happiest Minds, which reflects our ability to attract and retain good talent with our
compelling people engagement programs."

At around 3.19 pm, Happiest Minds was trading at Rs1345.75 per piece down by 3% on Sensex.