The MD of multibagger Happiest Minds says he is looking for clients in Europe, Middle East and Australia
- Most of the top midcap IT companies including Mphasis, L&T Infotech and Happiest Minds have more than 70% revenue coming from the US market.
- Meanwhile, leading technology companies like TCS, Infosys, HCL Technology are not very behind with 50-60% sales from the US.
- “Geography risk is something that is there and we have to take it on our chin,'' said Venkatraman Narayanan, MD and CFO at Happiest Minds Technologies in an interview with Business Insider.
AdvertisementIf tech stocks have been the street’s favourite last year, the latest entrant in that pack, Happiest Minds — the stock has quadrupled in value since its listing in September 2020 — is among the hottest.
It’s not a big surprise because the software exporter has clocked a 11% growth in revenue for the year ending March 2021. The momentum has continued into the new year as well. However, in an interview with Business Insider, Venkatraman Narayanan, managing director (MD) and chief financial officer (CFO) at Happiest Minds Technologies said that he would like to reduce one key risk element.
Most of India’s information technology service providers — from the biggest such as TCS and Infosys to the smaller ones like Mphasis and Mindtree — have a big chunk of revenue coming in from the US market. Revenue from the US is more than 70% for the top five mid-sized IT companies. Happiest Minds is no different.
Happiest Minds Technologies has one of the highest revenue concentrations in the US in comparison to top five midcap IT companies. Mindtree is almost close to getting 80% sales from the US market.
|IT companies||FY21 revenue from US|
|Happiest Minds Technologies||73.40%|
|Tata Consultancy Services||51.30%|
|Infosys (North America)||61.30%|
“Geography risk is something that is there and we have to take it on our chin,'' said Venkatraman Narayanan, MD and CFO at Happiest Minds Technologies in an interview with Business Insider.
Aware of this fact, companies have been trying to direct their focus towards other regions like Europe.
|Mid cap IT companies||FY21 revenue from US|
|L&T Infotech (North America)||68.30%|
|L&T Technology (North America)||61%|
|Oracle Financial Services||34%|
“Lot of activity (is) going on -- service offerings that are targeted towards the UK, Europe, Middle East and Australia. And our goal is while we continue growing on an absolute basis in the US, if we grow much faster in Europe, Middle East, Australia so that as a percentage of revenue we will see some diversification,” said Narayanan.
Happiest Minds Technologies is the newest mid cap IT services company founded in 2011 which got listed in September 2020. The stock has seen an uptrend since its listing and has gained 298% since then.
Its peer Mindtree is also working on increasing its investment in other regions to reduce dependence on American clients alone.
To increase the revenue from other parts of the world, Happiest Minds is looking to acquire companies where it wants to expand its business. “We are constantly looking for [acquisitions]...active discussions are ongoing with more than a few [companies],” said Narayanan.
AdvertisementIn the last one year, Happiest Minds has acquired one company in the US. The $10 million buyout of the Houston, Texas-based Pimcore Global Services in January 2021 has helped the company in the open source and retail vertical, Narayanan added.
SEE ALSO: Minimising the fallout from a Vodafone Idea collapse – here’s what lenders and experts suggest
Future Retail stocks cannot shake off the shock from the deal with Reliance falling through
Popular on BI
- How to use the realistic crying face filter on Snapchat
- Elon Musk praised Netflix for telling employees to quit if they couldn't work on content they disagreed with. He previously bashed the platform as having a 'woke mind virus.'
- The Terra LUNA crypto crash has sparked the debate on ‘true’ decentralisation
- India's wholesale inflation rises further to 15.08% in April from 14.55% a month ago
- China has released its list of top five sources of online fraud in 2022
- There is a strong case to go long on LIC say analysts and macroeconomic indicators
- Elon Musk says Twitter deal cannot move forward until Parag Agrawal proves less than 5% spam account claim
- Watch: Astronaut shares breathtaking photos of the moon as seen from space during Lunar Eclipse