Category: Information Technology

Happiest Minds Technologies thrives in Indian market, reports Q3 earnings growth

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Happiest Minds Technologies, a leading digital transformation and IT consulting firm has announced that India has become its second-largest market, experiencing significant growth.

In an interview with CNBC-TV18, Venkatraman Narayanan, MD and CFO, and Joseph Anantharaju, EVC and CEO-Product Engineering Services at Happiest Minds Technologies, discussed the Q3 earnings for the December-ended quarter.

Narayanan highlighted the robust growth in the Indian market, stating, “The Indian market is concerned, that is showing real good growth in line with what we are seeing in the economy. And after the US, it’s the second-largest market for us. And that is showing decent traction with new logo sign-ups that we have done this year; I mean, from India, and from verticals like manufacturing and industrial, which are going well for us.”

Regarding potential acquisitions, Narayanan mentioned a decent pipeline in the discussion, emphasising the company’s intention to close deals that align and integrate seamlessly with their existing customer-focused initiatives.

Also Read | Happiest Minds reiterates guidance and expects M&A in next two months

Anantharaju, discussing margins, stated, “We would like a 22-24% guideline with the hope that we will continue beating it as we have done for the past 15 or 16 quarters.”

On January 17, Happiest Minds Technologies reported a 3.5% year-on-year rise in net profit, reaching ₹59.6 crore for the third quarter ending December 31, 2023. In the same quarter last year, the company posted a net profit of ₹57.6 crore. The company’s revenue from operations also increased by 11.7% to ₹409.9 crore compared to ₹366.9 crore in the corresponding period of the previous fiscal year.

Also Read | Happiest Minds Q3 Results | IT company’s net rises 3.5%, revenue up 12%

For more details, watch the accompanying video

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why Manish Gunwani of Bandhan AMC is cautious about private banks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Manish Gunwani of Bandhan AMC is cautious on private banks at this juncture as he believes they do not offer a great risk-reward balance both from a cyclical and structural perspective.

From a cycle perspective, with low credit costs, most banks appear similarly positioned in terms of profitability and growth. However, there’s still a valuation gap between low and high price-to-book financials that I believe will converge, he explained. This convergence might affect the perceived value of these institutions, he noted.

Structurally, he observed signs of changing customer behavior, particularly in the current account/savings account (CASA) segment.

“A lot of the high price-to-book private banks have business models centered around granular deposit franchises with the assumption of CASA growth. But, due to technological advancements and financial shifts, if CASA is becoming an issue, then the high multiples these banks enjoy are at risk,” Gunwani elaborated.

He suggested that if CASA growth stalls, the resulting pressure on spreads could significantly impact profitability.

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Gunwani also touched upon various sectors, noting the attractive nature of oil and gas companies and the potential tactical trade opportunities in the information technology (IT) sector, given expectations of a soft landing.

He also mentioned the increasing allure of unlisted companies attracting talent, hinting at possible wage pressures in the market.

“I think the big return globally in equities can only be made in 2024. If the Western Central Bank, specifically the Fed is more dovish than what general expectation is,” he said.

Also Read | US Dollar stages biggest rally since March as global risks pile up

On a positive note, Gunwani identified oil and gas companies, especially those involved in divestment plays, as attractive investment opportunities. Despite challenges in various sectors, these companies seem to present promising prospects for investors seeking opportunities in the current market conditions.

For more, watch the accompanying video

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Good time to get back to IT stocks, advises Gautam Trivedi

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a recent interview with CNBC-TV18, Gautam Trivedi, Co-founder & Managing Partner at Nepean Capital, expressed optimism about the Information Technology (IT) sector, suggesting that now is a favorable time for investors to re-enter IT stocks.

Trivedi reassured investors that the past 18 months have not witnessed significant developments in the IT sector that would be considered missed opportunities. Analyzing the post-results research of major players such as Tata Consultancy Services (TCS), Infosys, HCLTech, and Wipro, Trivedi noted that valuation comfort is making a comeback. Infosys, for instance, is now trading at 18 times its FY26 earnings, indicating a positive trend in the sector. Although TCS still holds a relatively higher valuation compared to Infosys, Trivedi emphasized that overall valuation comfort is on the rise. Projections for FY25-FY26 suggest a potential 12-13-14% earnings growth, making it an opportune time for investors to re-enter the IT market.

Trivedi urged caution when considering small and midcap stocks, citing their recent strong rally. With the potential for increased volatility in these segments, he suggested that investors be more discerning and careful when putting incremental money into these stocks.

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Highlighting the performance of largecap stocks, Trivedi pointed out that heavyweight companies like Reliance Industries Lt (RIL), TCS, Infosys, and HDFC Bank, collectively constituting nearly 50% of the Nifty50, recorded an average return of only 9.5% in the 2023 calendar year. Based on this performance, Trivedi recommended that investors consider putting their money in largecaps as a safer and potentially more rewarding option.

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On Monday, January 15, the Reserve Bank of India (RBI) issued a preliminary circular detailing a thorough examination and streamlining of regulations that are relevant to both housing finance companies (HFCs) and non-banking financial companies (NBFCs). In a significant move, the central bank has opted to synchronize HFCs with the existing regulatory framework for deposit acceptance, aligning them with deposit-taking NBFCs. A notable aspect of the proposed modifications is the stipulation that all deposit-taking HFCs must uphold liquid assets amounting to 15% of the public deposits under their purview.

Expressing a positive outlook on non-banking financial companies (NBFCs), Trivedi, without specifying his views on IRFC, suggested that this segment, including IRFC, is becoming increasingly attractive. Despite the lag in performance of the entire banking, financial services, and insurance (BFSI) space over the last 12 months, Trivedi sees potential opportunities in NBFCs and encourages investors to explore this sector.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

WEF 2024: Cyber inequity is growing rapidly, says Akshay Joshi

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Cyber inequity is growing rapidly, with the number of organisations able to maintain minimum viable cyber resilience down by 30% over the past two years, said Akshay Joshi, Head of Industry and Partnerships, Centre for Cybersecurity, World Economic Forum (WEF).

“Cyber inequity is rather exacerbated; 90% of executives we surveyed (at our Annual Meeting on Cybersecurity) said this needs urgent attention,” Joshi told CNBC-TV18 Managing Editor Shereen Bhan in an exclusive interaction at Davos.

Across the world, operational disruptions due to cyber attacks are the biggest concern, and firms need to bake it into their designs and can’t afford to think of it as an afterthought, Joshi added.

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A worrying trend, as per Joshi, is that investments in cyber security tend to be less than 5% of the IT budget in companies, and this needs to change as companies need to make far more investments in cyber security.

There is an absolute need for public-private partnerships to fight cyber threats, he added. This is where artificial intelligence (AI) can have a positive impact, with Joshi highlighting that a positive use case of generative AI is to identify deep fakes and misinformation, while also adding that AI can help in the development of software codes and better detection of threats.

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Joshi highlighted that misinformation and disinformation in India ranks high in the World Economic Forum’s Global Risks Report. However, the country has an opportunity to make its cyber security policy consultative, with feedback from the industry.

Watch the accompanying video for the full report

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

HCLTech may outpace the growth in TCS and Infosys, says this analyst

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The third quarter (October-December) earnings of India’s top information technology (IT) companies is expected to be a mixed bag. According to Apurva Prasad of HDFC Securities, HCL Technologies (HCLTech) is likely to post better earnings than Tata Consultancy Services (TCS) or Infosys.

Prasad anticipates that HCLTech will showcase the highest growth in Q3, ranging between 3.5% and 4%. In contrast, he predicts a sequential decline for Tech Mahindra, Wipro, and Infosys.

Among other IT companies, Prasad believes LTIMindtree has the strongest prospects. He expects LTI to improve from a 6-7% growth rate this year to low teens, accompanied by mid-margin expansion.

Read Here | IT sector outlook: What experts anticipate in the third quarter of FY24

As per a recent CNBC-TV18 poll, four of India’s top six technology services companies — Infosys., TCS., Wipro, and Tech Mahindra — may post a decline in US dollar revenue during the December quarter.

The potential downturn is attributed to seasonality factors, higher-than-usual furloughs, and weakness in discretionary demand.

Also Read | IT Earnings Preview: Four of India’s top six IT companies may see revenue decline

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IT sector outlook: What experts anticipate in the third quarter of FY24

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Indian information technology (IT) sector is all set to report the earnings for the third quarter of the financial year 2024. Tata Consultancy Services (TCS) and Infosys will be kickstarting the October-December quarterly earnings season on January 11.

Experts are uncertain about the outlook given the uptick in furloughs, and subdued demand for discretionary services, in a seasonally weak quarter.

Wipro is projected to experience the sharpest dollar revenue decline at -2.4%, while Infosys could report a 1.5-2% dip, and TCS is expected to remain relatively flat.

In its expectations report, Kotak Institutional Equities predicted a muted performance across the IT sector in the third quarter, with market focus shifting towards the prospect of revenue acceleration in the fiscal year 2025.

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In an interview with CNBC-TV18, Kawaljeet Saluja, ED & Head-Research at Kotak Institutional Equities said, “The key thing which everyone will be focused on is revenue acceleration in FY25, and whether there are any signs of visibility of that acceleration.”

Saluja anticipates improved revenue growth in FY25, driven by mega deals ramping up, contributing a potential 2-4% to the overall growth of the IT industry in the fiscal year 2025.

For more details, watch the accompanying video

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Happiest Minds reiterates guidance and expects M&A in next two months

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bengaluru-based digital solutions provider Happiest Minds Technologies on December 19 reiterated its organic growth guidance of 12% and margin guidance of 22-24% for the financial year 2024.

Venkatraman Narayanan, the company’s Managing Director and CFO, and Joseph Anantharaju, Executive Vice Chairman and CEO of Product Engineering Services, shared insights into the company’s plans to achieve the target $1 billion in revenues by 2031.

Anantharaju said there is a lot of action in the generative artificial intelligence (Gen AI) business that the company set up a few months ago. Over the next five years, the company is targeting revenue contribution of at least 20% from this business.

The second important driver will be inorganic growth. Anantharaju said that while the company is aggressively pursuing some deals there seems to be hesitation among companies to strike a deal immediately as they hope for better valuations and offers as the overall deal environment improves. Nevertheless, he hopes to close a deal in the next couple of months.

The company’s last acquisition was in January 2023, when it bought Madurai-based IT services firm Sri Mookambika Infosolutions (SMI) for ₹111 crore.

For more, watch the accompanying video

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

L&T Tech on course to meet FY24 targets, aided by strategic bp deal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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L&T Technology Services is on track to achieve its financial year 2024 revenue growth and margin guidance with contributions from the recent strategic deal with global energy firm bp.

L&T targets revenue growth of 17.5 – 18.5% in FY24 with margin of around 17%.

On December 12, L&T Tech signed a multi-year engineering services pact with bp, one of world’s largest diversified energy companies. “This long-term relationship allows us to provide services for their global assets, emphasising top-tier operational efficiency through digital enablement,” the company said in an exchange filing.

L&T Tech Managing Director and CEO, Amit Chadha told CNBC-TV18 that the company aspires to make bp one of its top ten accounts.

Chadha is seeing bright spots in the artificial intelligence (AI), plant engineering, medical devices and automotive spaces. 

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Shares of L&T Tech gained over a percent intraday to touch ₹4,990 per share on December 12 after it announced the bp deal.

The stock of the IT major has rallied over 15% in the past month against a 7% gain in the benchmark Sensex.

Catch all the latest updates from the stock market here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

KPIT Technologies expects legacy part of business to decline and new technology to take over

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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At a time when businesses are looking to cut costs and focus on profitability, the expenditure on new technology will continue to rise, KPIT Technologies said on December 6.

“There are two parts of expenses the company incurs. The new technology area which KPIT focuses on is roughly about 30-40% while 60% is the legacy part. That legacy part will go down every year and the new technology part will keep on growing,” Kishor Patil, Co-Founder, MD and CEO of KPIT Technologies told CNBC-TV18 in an exclusive interaction.

Patil’s remark comes as the company, which provides embedded software and product engineering services to automotive companies, has been steadfast in its commitment to maintain a 37% constant currency growth in the fiscal year 2024, along with a 20% growth in profit after tax (PAT).

Reflecting on KPIT Technologies’ role in the automotive sector, the CEO said that it is a misconception that everything in the industry is outsourced for IT services. He explained that several IT service models are being used in the market that point toward the diversity and complexity of the technological landscape within the automotive sector.

KPIT Technologies’ shares ended almost a percent lower at Rs 1,463.20 on BSE. on December 6. In 2023 (year-to-date), the stock has given a return of nearly 110% percent as against benchmark Sensex which has risen a little over 13% during the period. The firm has market capitalisation of Rs 40,112.72 crore.

The company, headquartered in Pune, India, operates with development centres strategically located in Europe, the USA, Japan, and China, reflecting its global reach and influence.

Earlier in October this year, the Pune-based product engineering services provider to automotive companies, KPIT Technologies Ltd. has raised its financial year 2024 revenue growth guidance in constant currency terms.For the full financial year, the company now expects revenue growth of 37% in constant currency terms, from the earlier guidance, which ranged between 27% and 30%.

For the September quarter, KPIT Tech reported revenue growth of 9.2% sequentially to ₹1,199.1 crore from ₹1,097.6 crore in June. Net profit increased by 5.1% to ₹140.8 crore. The base quarter also had a one-time gain of ₹13.4 crore, excluding which, the net profit growth would be 16.8%, according to the company.

For more, watch the accompanying video

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow