Happiest Mind Technologies IPO - Angel Broking

Happiest Mind is a small sized IT services company promoted by Mr. Ashok Soota who was one of the founding members of Mindtree Ltd. The company's offerings include digital business, product engineering, infrastructure management and security services among others.

Strong presence in digital technologies to drive growth for the company:

In FY2020, 96.9% of company's revenues came from digital services and is amongst the highest Indian IT companies. The company is divided into three business units viz. 1) Digital Business processing 2) Product Engineering Services and 3) Infrastructure management and security services. The company offers solutions across the spectrum of various digital technologies such as Robotic Process Automation (RPA), Big Data and advanced analytics, Internet of Things (IoT), Cloud, Business Process Management (BPM) and security. A frost &Sullivam Report projects that digital spend is expected to grow at a CAGR of 20.2% from USD 69,100 crore in 2019 to 2,08,300 crore by 2025 and will account for 35% of total digital IT spend with legacy services making up for the balance 65%.

Strong promoter background and client relationship also provides comfort:

Happiest Mind Ltd. is founded by Mr.Ashok Soota who is also the Executive Chairman and Director of the company. Before founding Happiest Mind in 2011, Mr Soota was one of the founding members of MindTree Ltd prior to which he was also the vice chairman of Wipro Ltd. The company had 148 active customers as of Q1FY2021 with the share of repeat business growing consistently over the year to account for a significant portion of revenues indicating a high degree of customer stickiness.

Outlook & Valuation

At upper price band it is offered at 23.6x FY2020 EPS. Considering the very high exposure to digital services and strong promoter background we expect that the company will continue to grow at a faster pace as compared to similar sized companies and therefore should command a premium valuation to the peer group. We would therefore recommend investors to SUBSCRIBE to the IPO.

"At upper price band it is offered at 23.6x FY2020 EPS. Considering the very high exposure to digital services and strong promoter background we expect that the company will continue to grow at a faster pace as compared to similar sized companies and therefore should command a premium valuation to the peer group. We would therefore recommend investors to SUBSCRIBE to the IPO." - Mr. Yash Gupta, Equity Research Associate, Angel Broking Ltd.

Source : Equity Bulls

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