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Happiest Minds Technologies Limited — Investor Presentation 2021
Feb 10, 2021
61298_rns_2021-02-10_67de197f-1b14-4d72-9fed-5c00a3bbb88c.pdf
Investor Presentation
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Happiest Minds Technologies Limited
(formerly known as Happiest Minds Technologies Pvt Ltd) Regd. Office : #53/1-4, Hosur Main Road, Madivala, Bangalore-560068, Karnataka, India CIN of the Co. L72900KA2011PLC057931 P: +91 80 6196 0300, F: +91 80 6196 0700 www.happiestminds.com
February 10, 2021
Listing Compliance & Legal Regulatory Listing & Compliance
BSE Limited National Stock Exchange of India Limited
Phiroze Jeejeebhoy Towers Exchange Plaza, Bandra Kurla Complex
Dalal Street, Mumbai 400 001 Bandra East, Mumbai 400 051
Stock Code: 543227 Stock Code: HAPPSTMNDS
Dear Sir/Madam,
Sub: Earnings Presentation on the financial results of Q3 & nine months for FY’21
Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed a copy of the Earnings Presentation of the financial results of the Company for the quarter and nine months ended as on December 31,2020 that will be circulated to the Investors/Analysts for the Earnings Call scheduled on February 11, 2021.
This is for your information and records.
Thanking you, Yours faithfully,
For Happiest Minds Technologies Limited
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Praveen Kumar Darshankar Company Secretary & Compliance Officer Membership No. F6706
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February 2021
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This presentation may contain certain forward-looking statements, which involves risks and uncertainties that could cause our future results to differ materially from those in such forwardlooking statements. The COVID-19 pandemic could decrease our customers’ technology spend, delaying prospective customers’ purchasing decisions, and impact our ability to provide services; all of which could adversely affect our future revenue, margin and overall financial performance. Our operations could also be negatively impacted by a range of external factors not within our control those due to the We do not undertake to of our including pandemic. update any forward-looking statements that may be made from time to time by us or on our behalf.
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Next Generation Digital Transformation, Infrastructure, Security and Product Engineering Services Company
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IPO
Digital Digital
Agile
Active clients
RoCE[1]
In September 2020
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38 Fortune2000 / Forbes200 / Billion $ corporations
-
93% of repeat business [2]
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100 % digitally executed IPO
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- Heavily oversubscribed with healthy listing gains Reflects
RoE
Mission Statement
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Happiest Minds
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Ranked IT Services
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• Top India’s Best Workplaces rating for Women
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• Top India’s Best Workplaces on Glassdoor • Top India’s Best Workplaces #2 for Indian IT Services
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for IT/IT-BPM
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Our growth and profitability
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• Management Team & Corporate governance
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SMILES Values across 7 Countries
Sharing, Mindful, Integrity, Learning, Excellence, Social Responsibility
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2019
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Promoter
Ashok Soota
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*All logos are properties of their respective owners Note 1: Trailing 12 months Revenue from existing customers; 2: ROCE / ROE is nine months annualized
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IoT Blockchain
DevOps & RPA Cloud
Software Defined Networking / NFV BPM & Integration
Big Data & Adv. Analytics Security
BFSI Edutech Hi-Tech
Mfg/Industrial Retail Travel & Hosp.
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Learning Excellence
Integrity
Social
Responsibility
Mindful
Sharing
Our Mission
Happiest People . Happiest Customers
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Achieve a very Be the Be known as the Happiness successful IPO by or for each Evangelists before FY23 and in the company with highest other, our standards of interim provide a Customers and monetization event for Corporate Society Governance investors/team by FY20
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Happiest Minds is the first Indian IT firm to be The Mindful IT Company
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Be recognized for Be a leader in Thought Leadership in Social Responsibility our focused areas of initiatives technology and solutions
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Business Agile
Transformation Organization
Agile
Business
CREATING
MINDFULLY
DIGITAL
AGILE
CAPITAL
Platformize and Agile
Modernize Delivery
Reimagining Engineering &
Customer Experience Operational Excellence
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| Particulars | Q3 FY 21 | Q2 FY 21 | QoQ | Q3 FY 20 | YoY | 9M FY 21 | 9M FY 20 | YoY |
|---|---|---|---|---|---|---|---|---|
| Revenue ($'000) | 26,202 | 24,712 | 6.0% | 24,085 | 8.8% | 74,358 | 72,735 | 2.2% |
| Revenue (₹ lakhs)1 | 20,129 | 18,791 | 7.1% | 17,557 | 14.6% | 57,433 | 52,402 | 9.6% |
| EBITDA (₹ lakhs) | 5,969 | 4,939 | 20.9% | 2,811 | 112.3% | 15,690 | 8,749 | 79.3% |
| EBITDA % | 29.7% | 26.3% | 337 bps | 16.0% |
1364 bps | 27.3% |
16.7% | 1062 bps |
| PAT (₹ lakhs) | 4,215 | 3,408 | 23.7% | 2,138 | 97.1% | 12,641 | 6,641 | 90.3% |
| PAT % | 20.9% | 18.1% | 280 bps | 12.2% | 876 bps | 22.0% |
12.7% | 934 bps |
Note: 1. Total Income
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Digital
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Agile
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% of Revenue % of Revenue
92.8% 92.8%
90.2%
87.9%
97.2% 96.9% 97.1%
96.6%
96.3%
71.1%
FY 19 FY20 Q1 21 Q2 21 Q3 21 FY19 FY20 Q1 21 Q2 21 Q3 21
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Total Revenue EBITDA Total revenue mix (Q3 FY 21) [1]
(₹ Lakhs) % Margin
Total Income (₹ Lakhs)
4.2%
1.6% 11.0% 15.8% 25.6% 26.3% 29.7% 21.5%
71,423
60,181
48,912 11,312 49.5%
24.8%
6,628 5,969
4,782 4,939
18,699 18,791 20,129
762
IMSS DBS PES Oth Inc
FY18 FY19 FY20 Q1 21 Q2 21 Q3 21
FY18 FY19 FY20 Q1 21 Q2 21 Q3 21
High FCF [2] conversion Utilization & Happiest Minds, offshore/onsite Voluntary Attrition % [3]
(₹ Lakhs) % FCF Conversion Utilization %
85.2% 98.8% 99.6% 99.8% 99.8% 99.2% 68.4% 77.3% 76.9% 74.9% 78.7% 81.6% 25.2%
2,253 2,462 2,666 2,658 2,721 2,885 18.7%
11,266 16.0%
14.1%
13.1%
6,549
5,920
4,772 4,931 95.3% 94.6% 95.4% 95.3% 95.1% 95.0%
649
4.7% 5.4% 4.6% 4.7% 4.9% 5.0%
FY18 FY19 FY20 Q1 21 Q2 21 Q3 21 FY18 FY19 FY20 Q1 21 Q2 21 Q3 21 FY19 FY20 Q1 21 Q2 21 Q3 21
Onsite Offshore
Note: 1. Calculated based on total income split, 2. FCF Conversion = FCF/EBITDA and FCF = EBITDA – Capex. 3. Attrition % for TTM Trailing 12 Months 10
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Revenue model
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Q3 21
Model Geography Digital Revenue [1] Vertical [1]
7.0%
3.8% 11.0% [3.4%] 6.9%
22.2% 13.4% 24.9%
41.0% 7.0%
14.4%
10.6%
17.4%
8.7%
20.2%
72.2%
77.8% 21.6% 14.4% 2.2%
Digital Infra / Cloud SAAS
T&M FP Americas Europe India ROW Edu Tech Hitech Retail TME
Security Analytics / AI
BFSI Industrial MFG Others
IoT Others
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Revenue Concentration [3]
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Million $ Customers [2]
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(% Revenue)
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(#)
66.5%
49.4%
34.4%
14.8%
Top 1 Top 5 Top 10 Top 20
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25 23 24 25
21
16
FY18 FY19 FY20 Q1 21 Q2 21 Q3 21
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Notes: 1. TME: Travel, Media and Entertainment, 2. Based on quarter revenues on an annualized basis. 3. Top 20 includes Top 1, 5 & 10
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Onsite/Offshore Avg. annual revenue / active customer
By Revenue (USD ‘000)
683
659
615 615
502
78.6% 78.0% 77.5% 79.0% 78.1% 81.0% 471
21.4% 22.0% 22.5% 21.0% 21.9% 19.0%
FY18 FY19 FY20 Q1 21 Q2 21 Q3 21
FY18 FY19 FY20 Q1 21 Q2 21 Q3 21
Onsite Offshore
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| FY18 | FY19 | FY20 | FY21Q1 | FY21Q2 | FY21 Q3 | FY21 9M | |
|---|---|---|---|---|---|---|---|
| Customer Industry group | |||||||
| Edutech | 18.0% | 21.3% | 21.3% | 27.0% | 27.0% | 24.9% | 26.3% |
| Hitech | 24.6% | 21.0% | 21.0% | 20.5% | 19.5% | 20.2% | 20.1% |
| BFSI | 17.9% | 18.2% | 17.5% | 17.4% | 16.3% | 17.4% | 17.0% |
| Entertainment (TME) | 11.0% | 13.8% | 17.1% | 12.9% | 13.0% | 14.4% | 13.5% |
| Retail | 7.0% | 6.9% | 7.5% | 5.7% | 4.5% | 2.2% | 4.1% |
| Industrial | 6.2% | 8.1% | 7.0% | 6.4% | 6.9% | 7.0% | 6.8% |
| Manufacturing | 3.2% | 3.8% | 3.7% | 5.6% | 6.8% | 6.9% | 6.5% |
| Others | 12.3% | 6.9% | 4.9% | 4.6% | 6.0% | 7.0% | 5.9% |
| Digital Service Offerings | |||||||
| Digital infrastructure/Cloud | - | 40.9% | 31.2% | 43.7% | 41.1% | 41.0% | 41.6% |
| SaaS | - | 28.6% | 29.4% | 23.6% | 24.6% | 21.6% | 23.4% |
| Security solutions | - | 10.2% | 14.9% | 7.6% | 7.4% | 8.7% | 7.6% |
| Analytics/AI | - | 9.1% | 11.6% | 12.1% | 13.5% | 14.4% | 13.4% |
| IoT | - | 8.4% | 9.8% | 9.3% | 10.5% | 11.0% | 10.9% |
| Total | - | 97.2% | 96.9% | 96.3% | 97.1% | 96.6% | 96.8% |
| Automation as a % of total revenue |
20.7% | 24.2% | 24.3% | 27.8% | 25.5% |
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| FY18 | FY19 | FY20 | FY21Q1 | FY21Q2 | FY21 Q3 | FY21 9M | |
|---|---|---|---|---|---|---|---|
| Location of external customer | |||||||
| USA | 73.5% | 75.5% | 77.5% | 77.3% | 77.3% | 72.2% | 75.5% |
| India | 11.7% | 11.9% | 11.9% | 10.9% | 10.9% | 13.4% | 11.8% |
| Europe | 11.4% | 9.5% | 7.2% | 9.8% | 9.2% | 10.6% | 9.9% |
| ROW | 3.4% | 3.1% | 3.4% | 2.0% | 2.6% | 3.8% | 2.9% |
| Number of customers based on quarter revenues on an annualized basis (#) |
|||||||
| $ 10 M + | 1 | 1 | 1 | 1 | 1 | 1 | |
| $ 5M to $ 10M | 2 | 2 | - | 1 | - | 2 | 2 |
| $ 3M to $ 5M | 2 | 1 | 9 | 4 | 6 | 5 | 5 |
| $ 1M to $ 3M | 12 | 17 | 15 | 17 | 17 | 17 | 17 |
| Total | 16 | 21 | 25 | 23 | 24 | 25 | 25 |
| Revenue mix by delivery | |||||||
| Onsite | 21.4% | 22.0% | 22.5% | 21.0% | 21.9% | 19.0% | 20.6% |
| Offshore1 | 78.6% | 78.0% | 77.5% | 79.0% | 78.1% | 81.0% | 79.3% |
| Revenue by Contract type | |||||||
| Fixed Price | 18.4% | 16.8% | 19.0% | 18.8% | 19.3% | 22.2% | 20.7% |
| Time and Material | 81.6% | 83.2% | 81.0% | 81.2% | 80.7% | 77.8% | 79.3% |
| Active customers | |||||||
| # of active customers | 173 | 163 | 157 | 148 | 152 | 155 | 155 |
| Fortune2000 / Forbes200 / Billion $ corporations |
|||||||
| # of customers | 37 | 36 | 39 | 38 | 38 |
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Note: 1. Offshore: Revenues from customers served from India
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| FY18 | FY19 | FY20 | FY21Q1 | FY21Q2 | FY21Q3 | FY21 9M | |
|---|---|---|---|---|---|---|---|
| Happiest Minds | |||||||
| Onsite | 105 | 132 | 123 | 124 | 133 | 145 | 145 |
| Offshore | 2,148 | 2,330 | 2,543 | 2,534 | 2,588 | 2,740 | 2,740 |
| Total | 2,253 | 2,462 | 2,666 | 2,658 | 2,721 | 2,885 | 2,885 |
| Happiest Minds by delivery centres | |||||||
| Onsite | 4.7% | 5.4% | 4.6% | 4.7% | 4.9% | 5.0% | 5.0% |
| Offshore1 | 95.3% | 94.6% | 95.4% | 95.3% | 95.1% | 95.0% | 95.0% |
| Diversity | |||||||
| Women Happiest Minds | 22.0% | 23.0% | 24.0% | 23.4% | 23.3% | 24.0% | 24.0% |
| Utilization | |||||||
| Utilization % | 68.4% | 77.3% | 76.9% | 74.9% | 78.7% | 81.6% | 78.5% |
| Days Sales Outstanding | |||||||
| Billed | 74 | 80 | 60 | 51 | 51 | 46 | 48 |
| Unbilled | 6 | 11 | 23 | 32 | 26 | 31 | 32 |
| Total DSO (Days) | 80 | 91 | 83 | 83 | 77 | 77 | 80 |
| EPS (₹ Per Share) | |||||||
| Year / Nine Months | 5.36 | 8.91 | |||||
| Capital Return Ratios % | |||||||
| Return on Capital Employed (Year / Nine Months) |
28.9% | 36.2% | |||||
| Return on Equity (Year / Nine Months) |
27.1% | 33.2% |
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Note: 1. Offshore: Revenues from customers served from India
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| (All figures in ₹ Lakhs) | FY18 | FY18 | FY19 | FY19 | FY20 | FY20 | FY21Q1 | FY21Q1 | FY21Q2 | FY21Q2 | FY21Q3 | FY21Q3 | FY21 9M | FY21 9M |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue by Business Units | ||||||||||||||
| Infrastructure Management & Security Services |
9,862 | 20.2% | 12,943 | 21.5% | 15,361 | 21.5% | 3,641 | 19.5% | 3,959 | 21.1% | 4,334 | 21.5% | 11,934 | 20.8% |
| Digital Business Solutions | 15,403 | 31.5% | 18,090 | 30.1% | 19,167 | 26.8% | 4,598 | 24.6% | 4,710 | 25.1% | 4,985 | 24.8% | 14,293 | 24.9% |
| Product Engineering Services | 21,024 | 43.0% | 28,003 | 46.5% | 35,293 | 49.4% | 9,463 | 50.6% | 9,615 | 51.2% | 9,965 | 49.5% | 29,043 | 50.6% |
| Total Revenue | 46,289 | 94.6% | 59,036 | 98.1% | 69,821 | 97.8% | 17,702 | 94.7% | 18,284 | 97.3% | 19,284 | 95.8% | 55,270 | 96.2% |
| Other income | 2,623 | 5.4% | 1,145 | 1.9% | 1,602 | 2.2% | 997 | 5.3% | 507 | 2.7% | 845 | 4.2% | 2,163 | 3.8% |
| Total income | 48,912 | 100.0% | 60,181 | 100.0% | 71,423 | 100.0% | 18,699 | 100.0% | 18,791 | 100.0% | 20,129 | 100.0% | 57,433 | 100.0% |
| EBITDA | 762 | 1.6% | 6,628 | 11.0% | 11,312 | 15.8% | 4,782 | 25.6% | 4,939 | 26.3% | 5,969 | 29.7% | 15,690 | 27.3% |
| PAT | -2,247 | -4.6% | 1,421 | 2.4% | 7,171 | 10.0% | 5,018 | 26.8% | 3,408 | 18.1% | 4,215 | 20.9% | 12,641 | 22.0% |
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Note: EBITDA % and PAT % are calculated as a % of total income
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| Summary Profit & Loss statement | Summary Profit & Loss statement | Summary Profit & Loss statement | Summary Profit & Loss statement | Summary Profit & Loss statement | Summary Profit & Loss statement | Summary Profit & Loss statement | Summary Profit & Loss statement |
|---|---|---|---|---|---|---|---|
| (All figures in₹Lakhs) | FY18 | FY19 | FY20 | FY21 Q1 | FY21 Q2 | FY21 Q3 | FY21 9M |
| Income | |||||||
| Operating revenue | 46,289 | 59,036 |
69,821 |
17,702 |
18,284 |
19,284 |
55,270 |
| Other income | 2,623 | 1,145 |
1,602 |
997 |
507 |
845 |
2,163 |
| Total income | 48,912 | 60,181 |
71,423 |
18,699 |
18,791 |
20,129 |
57,433 |
| Cost of revenue | 32,652 | 36,987 |
42,927 |
9,978 |
10,401 |
11,155 |
31,534 |
| Gross margin | 13,637 | 22,049 |
26,894 |
7,724 |
7,884 |
8,129 |
23,737 |
| % | 29.5% | 37.3% | 38.5% | 43.6% | 43.1% | 42.2% | 42.9% |
| SG&A cost | 15,498 | 16,566 |
17,184 |
3,939 |
3,452 |
3,005 |
10,210 |
| EBITDA | 762 | 6,628 |
11,312 |
4,782 |
4,939 |
5,969 |
15,690 |
| % | 1.6% | 11.0% | 15.8% | 25.6% | 26.3% | 29.7% | 27.3% |
| Depreciation | 2,075 | 2,478 |
2,023 |
512 |
512 |
516 |
1,540 |
| EBIT | (1,313) | 4,150 | 9,289 |
4,270 |
4,427 |
5,453 |
14,150 |
| % | -2.7% | 6.9% | 13.0% | 22.8% | 23.6% | 27.1% | 24.6% |
| Finance cost | 995 | 1,594 |
802 |
186 |
160 |
126 |
472 |
| **PBT before exceptional items *** | (2,308) | 2,556 | 8,487 |
4,084 |
4,267 |
5,327 |
13,678 |
| % | -4.7% | 4.2% | 11.9% | 21.8% | 22.7% | 26.5% | 23.8% |
| Exceptional Items+ | - | 1,258 | 1,126 | - |
- | - | - |
| **PBT *** | (2,308) | 1,298 | 7,361 |
4,084 |
4,267 |
5,327 |
13,678 |
| % | -4.7% | 2.2% | 10.3% | 21.8% | 22.7% | 26.5% | 23.8% |
| Income tax expense | (61) | (123) | 190 | (934) |
859 | 1,112 |
1,037 |
| **PAT *** | (2,247) | 1,421 | 7,171 |
5,018 |
3,408 |
4,215 |
12,641 |
| % | -4.6% | 2.4% | 10.0% | 26.8% | 18.1% | 20.9% | 22.0% |
* PBT before exceptional items, PBT and PAT " for FY18 & FY19 are restated as per IndAs, forming part of our offer documents.
[+] Exceptional items for FY19 & FY20 refer to Impairment of Goodwill.
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| Condensed Balance Sheet | Condensed Balance Sheet | Condensed Balance Sheet | Condensed Balance Sheet | Condensed Balance Sheet | Condensed Balance Sheet | Condensed Balance Sheet |
|---|---|---|---|---|---|---|
| (All figures in₹Lakhs) | 31.03.2018 | 31.03.2019 | 31.03.2020 | 30.06.2020 | 30.09.2020 | 31.12.2020 |
| Assets | ||||||
| Non-current Assets | ||||||
| Property, plant and equipment | 264 | 214 | 93 | 77 | 60 | 72 |
| Goodwill | 2,961 | 1,736 | 610 | 610 | 611 | 611 |
| Financial & Other assets | 7,685 | 6,003 | 5,598 | 6,266 | 5,788 | 5,040 |
| Total non-current assets (A) | 10,910 | 7,953 | 6,301 | 6,953 | 6,459 | 5,723 |
| Current assets | ||||||
| Financial & Other assets | ||||||
| i. Trade receivable | 9,437 | 12,927 | 11,487 | 9,851 | 10,302 | 9,765 |
| ii. Cash & Cash equivalents, Investments & Other financial assets |
16,928 | 19,610 | 31,967 | 39,196 | 52,387 | 54,286 |
| iii. Other assets | 1,424 | 862 | 1,060 | 1,308 | 1,721 | 1,531 |
| Total current assets (B) | 27,789 | 33,399 | 44,514 | 50,355 | 64,410 | 65,582 |
| Total assets (A + B) | 38,699 | 41,352 | 50,815 | 57,308 | 70,869 | 71,305 |
| Equity and Liabilities | ||||||
| Total equity (A) | (10,888) | (6,605) | 26,531 | 31,901 | 46,380 | 50,836 |
| Non-current liabilities | ||||||
| Financial liabilities | 5,797 | 3,814 | 1,863 | 1,674 | 1,518 | 1,248 |
| Provisions & Deferred tax liability | 935 | 940 | 1,255 | 1,508 | 1,513 | 1,662 |
| Total non-current liabilities (B) | 6,732 | 4,754 | 3,118 | 3,182 | 3,031 | 2,910 |
| Current liabilities | ||||||
| Financial & Contract liabilities | ||||||
| i. Trade payable | 2,498 | 2,878 | 3,442 | 3,600 | 6,307 | 3,781 |
| ii. Others | 38,866 | 38,591 | 15,947 | 15,907 | 12,402 | 10,931 |
| Provisions & Other current liabilities | 1,491 | 1,734 | 1,777 | 2,718 | 2,749 | 2,847 |
| Total current liabilities (C) | 42,855 | 43,203 | 21,166 | 22,225 | 21,458 | 17,559 |
| Total liabilities (D = B + C) | 49,587 | 47,957 | 24,284 | 25,407 | 24,489 | 20,469 |
| Total equity and liabilities (A + D) | 38,699 | 41,352 | 50,815 | 57,308 | 70,869 | 71,305 |
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