Markets
Amid an IT slowdown, one company is aiming for double-digit growth
Summary
- With bold bets on Generative AI, SaaS, and large account expansion, this mid-tier IT firm is defying the slowdown—staying firmly on course for $1 billion in revenue by 2031.
As India’s IT sector braces for a US slowdown, Bengaluru-based Happiest Minds is charting its own course. The mid-tier digital transformation specialist is pushing ahead with an ambitious strategy, targeting double-digit expansion through FY26 and FY27—even as larger rivals struggle to gain momentum.
Its strategy? A multi-pronged push into emerging technologies, productized services, and high-value client relationships—bolstered by strategic acquisitions and a leadership shake-up. Rather than playing defense against macroeconomic uncertainty, Happiest Minds is going all in on reinvention.
Read this | CG Power rides India’s infrastructure boom with rail, semiconductor bets
“The market is predicting a US slowdown or recession. This has clouded the prospects for the Indian IT industry. We want to state emphatically that at Happiest Minds, we see no recession-driven slowdown," said chairman and chief mentor Ashok Soota at a 26 March press conference.
This confidence stems from a series of strategic shifts—what the company calls its '10 transformational changes'—designed to strengthen its competitive edge and ensure resilience in uncertain times.
“Thanks to our 10 transformational changes and our dedicated teams, we see a good view ahead for the next two years," he added," Soota added.
Happiest Minds isn’t just bracing for macroeconomic challenges—it’s reinventing its business model to move up the value chain, expand into productized services, and deepen client relationships in high-growth sectors. This three-pronged strategy—centered on technology innovation, sales expansion, and operational excellence—is not only insulating the company from external risks but also positioning it as a frontrunner in the digital economy.
Generative AI and industry focus
At the core of this reinvention is a push into cutting-edge technologies like Generative AI, alongside a sharper industry focus.
Happiest Minds is doubling down on GenAI, launching a dedicated Business Service Unit led by its former CTO to develop enterprise-grade AI solutions. The initiative is designed to accelerate digital transformation for clients, embedding AI-driven efficiencies across operations.
To ensure its AI and digital solutions align with industry-specific needs, the company has adopted a verticalized structure, with dedicated teams across six high-growth sectors, including BFSI, EdTech, and Healthcare. This specialization allows Happiest Minds to deliver high-impact, tailored digital transformation projects, setting it apart in a crowded IT services market.
A key growth lever is expanding smaller accounts into large-scale engagements. Clients currently contributing $2–5 million annually are being nurtured into $10–20 million partnerships over the next two years. A focused team of client partners is driving this expansion, deepening relationships with 10–15 high-potential accounts to create a more predictable revenue stream while reducing volatility.
Read this | How Accenture leapt ahead of Indian IT firms with large deals
Happiest Minds is also sharpening its focus on private equity (PE) firms and their portfolio companies, offering specialized services such as tech due diligence, cybersecurity, and digital modernization—segments that remain resilient even in downturns.
Simultaneously, the company is expanding within the Global Capability Centres (GCCs) ecosystem, helping multinational corporations optimize and scale their global delivery centers in India and other cost-efficient markets.
By tapping into these high-growth segments, Happiest Minds is building a more recession-proof business, reducing its reliance on traditional IT spending cycles while capitalizing on long-term digital transformation trends.
Pivoting to product innovation – SaaS and HaaS
Happiest Minds is reducing its reliance on traditional, manpower-driven services by expanding into productized solutions and subscription-based models.
A key step in this shift was its $94.5 million (around ₹779 crore) acquisition of PureSoftware in April 2024. The deal brought in Arttha, a digital banking platform, which is now being transitioned to a Software-as-a-Service (SaaS) model, catering to both on-premise and cloud-based clients.
The company is also betting on Hardware-as-a-Service (HaaS), with a new offering set to roll out in two phases—an initial version by Q4FY25, followed by a full-scale launch in FY26. Management expects the initiative to turn cash-positive within its first year, underscoring its disciplined investment approach.
While organic growth remains a priority, strategic acquisitions have accelerated Happiest Minds' expansion and strengthened its global footprint.
The PureSoftware acquisition not only bolstered the company's fintech capabilities but also diversified its revenue streams, extending its reach into Mexico, Singapore, Malaysia, and Africa—helping reduce its reliance on the US market.
Meanwhile, the $8.5 million (around ₹71 crore) acquisition of US-based Aureus Tech Systems enhanced Happiest Minds’ digital product engineering expertise, strengthening onshore delivery and improving client proximity.
Both acquisitions, seamlessly integrated in Q1FY25, have helped push Happiest Minds' revenue growth ahead of industry benchmarks, setting a higher baseline for FY26 and FY27.
Leadership revamp
As Happiest Minds enters its next phase of growth, a leadership overhaul is setting the stage for accelerated expansion.
In March, Joseph Anantharaju was elevated from executive vice chairman to co-chairman & CEO, while Ashok Soota transitioned to executive chairman & chief mentor—ensuring continuity in culture while empowering new leadership to steer the company’s long-term strategy.
The appointment of Maninder Singh as chief growth officer adds further momentum to client acquisition and cross-selling, reinforcing Happiest Minds’ reputation for agility and customer-centric innovation.
Financial outlook
Happiest Minds expects to sustain double-digit organic growth in FY26 and FY27, with analysts projecting FY26 revenue to reach ₹2,475 crore, a 21% YoY increase.
Despite continued investments in HaaS, GenAI, and talent acquisition, the company remains confident in maintaining Ebitda margins in the 20–22% range, reflecting its disciplined cost management and focus on operational efficiency.
And while potential US slowdown remains a risk, Happiest Minds has built a diversified revenue base to cushion against macroeconomic headwinds.
Its focus on private equity-backed firms and GCCs ensures demand from businesses that continue investing in tech upgrades, irrespective of economic cycles.
At the same time, expansion into Latin America, the Middle East & Africa, and Southeast Asia is reducing its dependence on the US. The company’s pivot to SaaS and HaaS is also creating predictable, subscription-based revenue streams, further insulating it from cyclical downturns.
Standing out in a crowded market
In an increasingly competitive IT services landscape, Happiest Minds is outpacing both industry giants and mid-tier rivals.
While TCS, Infosys, and Wipro struggle with low-single-digit growth, Happiest Minds is charting a different trajectory, with projected growth rates in the mid-teens to low-20s—well above the industry average.
Among mid-tier players like Coforge, Persistent Systems, and LTIMindtree, Happiest Minds sets itself apart with higher growth rates, stronger margins, and deep expertise in digital transformation.
With Ebitda margins of around 21%—among the highest in its category—and a 95% offshore delivery model, the company maintains a lean, cost-efficient operation while delivering premium digital services.
On track to hit $1 billion revenue by 2031
With strategic agility and an aggressive push into emerging technologies, Happiest Minds is well on its way to achieving its $1 billion revenue target by 2031.
For more such analyses, read Profit Pulse.
By staying ahead of industry shifts—whether in AI, cloud-based solutions, or vertical-specific digital transformation—the company is carving out a place among global digital engineering leaders like EPAM Systems and Globant.
About the author: Suchitra Mandal is a proficient financial writer with expertise in delivering well-researched insights and detailed analyses of companies' performance and market trends.
Disclosure: The author does not hold shares in any of the companies discussed. The views expressed are for informational purposes only and should not be considered investment advice. Readers are encouraged to conduct their own research and consult a financial professional before making any investment decisions.
