Happiest Minds Technologies acquired Sri Mookambika Infosolutions for ₹111 crores

Happiest Minds Technologies Ltd. announced that it has acquired Sri Mookambika Infosolutions, an IT services company situated in Madurai (SMI). The agreement included 111 crores in immediate and deferred equity considerations.

More than 400 SMI workers who are stationed abroad will be absorbed by Happiest Minds as part of the deal. As of the end of December, the Bengaluru-based IT services company employed 4,611 people.

SMI is a “profitable” firm, according to Happiest Minds, with an annual revenue run rate of $9 million as of FY22, according to a regulatory filing. “SMI brings deep domain capabilities, which add to our healthcare vertical strength — and align well with our ‘Product Engineering Services business unit,” said Joseph Anantharaju, executive vice-chairman and chief executive of Product Engineering Services at Happiest Minds. Venkatraman Narayanan, managing director, and chief financial officer at Happiest Minds, said SMI will add “expertise in healthcare, and a vibrant talent pool in the burgeoning tier-II locations of Madurai and Coimbatore,” to the company’s portfolio.

According to Happiest Minds, SMI primarily serves US-based businesses.

Shares of Happiest Minds finished 1.67% lower at $861.80 prior to the news, nearly mirroring a 1.27% decline in the benchmark index Sensex.

Happiest Minds reported a 3.2% sequential increase in rupee revenue to 366.88 crores in the third quarter of the fiscal year. The operating margin decreased by 110 basis points to 15.4%, while net profit dropped by 3.1% sequentially to 57.58 crores. Additionally, the business recorded a 20.9% attrition rate, while net staff utilization fell 50 basis points sequentially to 80.1%. In the quarter ending in December, the business added nine agreements.

The firm anticipates further growth, according to Anantharaju, because clients “are significantly investing in cloud, experience, and analytics as part of their strategic digital objectives.”

“Our technology depth has resulted in a strong pipeline of large deals, many of them with Fortune 500 companies,” he added.

The upbeat projection comes amid a run of regular contract signing for the IT services sector in a historically poor quarter.

Digital services, comprising the cloud and automation sectors, continued to be the major driver for deal signings for the overall industry, according to brokerage BNP Paribas in a report on IT services transactions.

“Deal signings improved in North America, and were decent in Europe and the rest of the world as well,” said Kumar Rakesh, vice president of equity research at BNP Paribas.