Happiest Minds breaks even in FY16; plans takeovers to boost growth

Software services provider Happiest Minds Technologies Pvt. Ltd is looking for acquisitions to accelerate growth after breaking even in the year through March 2016 for the first time since its inception in late 2011, founder Ashok Soota said.

Soota didn’t share details of the company’s profit but said revenue grew 27% in rupee terms. The company reported revenue of Rs 276 crore in 2014-15. This puts its revenue for 2015-16 around Rs 350 crore.

Soota, who is also the chairman of Happiest Minds, told VCCircle the company would now consider “one or two small acquisitions”.

The company, backed by Intel Capital and JP Morgan, has a target of achieving 20-25% of its revenue from inorganic growth within a five year-timeframe.

Separately, CEO Sashi Kumar said the company achieved profitability in only its fourth full year of operations because it functions like a nimble startup.

Soota, 73, is one of the pioneers of the Indian IT services industry. He had led Wipro’s IT business for 15 years from 1984. He later co-founded Mindtree with 11 others in 1999. In 2011, he walked out of Mindtree to start Happiest Minds.

In an interview with VCCircle earlier this year, Soota had said 2015-16 would be the company’s first full profitable year.

On acquisitions, Soota said geographic expansion, access to new technology and intellectual property are the parameters for considering takeover targets.

He said there is a reasonable prospect of closing one or two acquisitions in the current financial year.

Happiest Minds plans to do acquisitions through internal accruals and a small fund infusion from existing investors. The company had raised $45 million from Intel Capital and Canaan Partners in 2011. Canaan later sold its stake to JP Morgan.

The IT company has set itself a target of achieving $100 million revenue run rate by the sixth year of its operations and to go public by the seventh full financial year of its existence.

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