Happiest Minds reported 10.7% YoY growth for Q3 FY’26, reflecting steady execution amid global turbulence. The management highlighted the official launch of the 11th strategic transformation, ‘AI First, Agile Always,’ positioning the company for an AI-driven future. Key financial metrics showed an EBITDA margin of 20.4%, maintaining the guided range. Significant platform wins, particularly in GenAI and Agentic AI, underpin confidence for accelerated growth beyond the committed 10% target.
Q3 FY’26 Financial Highlights and Strategic Pivot
For the quarter ending December 31, 2025, Happiest Minds delivered $65.7 million in revenue, marking a 7.1% YoY growth in constant currency. In rupee terms, revenues grew 10.7% YoY to INR 588 crores. The EBITDA margin stood at 20.4%, remaining within the guided range of 20% to 22%. Operating margin improved sequentially to 17.4%, supported by favorable forex conditions and strong profitability in the GBS segment.
The company emphasized that its adjusted PAT, which excludes one-time items like the new wage code charge (INR 22.3 crores), reflects a true depiction of performance. For the 9-month period, dollar revenues grew 10.2% YoY, maintaining the double-digit growth commitment.
The ‘AI First, Agile Always’ Transformation
Chairman & Chief Mentor, Mr. Ashok Soota, asserted that the recent global market turbulence surrounding AI is an opportunity, not a threat, reinforcing the company’s strategic choices. The new 11th strategic transformation, ‘AI First, Agile Always,’ is a structural shift focused on building value in an AI-driven world, supported by 11 specific strategic programs. The key enabler is the AI Services Delivery Platform, which is already moving customer initiatives from pilot to production.
CEO & Co-Chairman, Mr. Joseph Anantharaju, noted that customer conversations are moving beyond experimentation toward embedding AI into core, scalable workflows. The company now has 32 GenAI and Agentic AI use cases moving from prototype to production scale. Furthermore, the Agentic AI approach, utilizing hybrid delivery models, is seeing interest from enterprises and private equity firms.
Business Unit Performance and Deal Flow
The PDES segment remains the largest, anchored by platform modernization with increasing AI embedding. GBS and AI services showed significant momentum, with revenues growing close to 50% quarter-over-quarter as deployments moved decisively to production.
From a vertical perspective, BFSI and Healthcare led growth this quarter. Regarding deal wins, the management confirmed a minimum TCV threshold of US$250 million for deals highlighted in press releases, though consulting and discovery work with potentially lower ACV but higher follow-up value are also publicized.
Outlook and Capital Management
Management expressed high confidence that the AI-led strategy will lead to an increase in guidance beyond the committed 10% growth for the next four years. CFO Mr. Anand Balakrishnan confirmed that liquidity is strong at INR 1520 crores. While margin pressure exists, utilizations improved to 82%. Future focus includes resolving the increased DSO, which rose to 92 days.
Regarding the retail vertical’s sequential decline, the drop was largely attributed to billing cycle normalization (fewer billing cycles in Q3 compared to Q2) rather than industry weakness or productivity ramp-downs. The management also reaffirmed commitment to the existing growth path, noting that the IT industry is seeing broad share price corrections, but Happiest Minds believes its AI focus provides a ‘secret weapon’ for accelerated rates.
Discussion on Non-Core Assets (Happiest Health)
Addressing questions on the stake sale rumor, Mr. Ashok Soota emphatically confirmed his ongoing leadership role in the company’s transformation, stating, ‘there is no change’ in his commitment. Regarding the IPO timeline for Happiest Health, Mr. Soota indicated that given its current early stage and revenue profile, the IPO could be approximately 6 years away, suggesting FY’27 is too early for listing plans.
Source: BSE
