Happiest Minds Technologies Reports Mixed Performance in Q1 2024 Financial Results

Happiest Minds Technologies, a midcap IT software company, recently declared its financial results for the quarter ending June 2024. The company has received a 'Sell' call from MarketsMOJO based on its negative financial performance in the quarter.

According to the financials, Happiest Minds has seen a decline in its score from 2 to -11 in the last 3 months. However, there are some positive aspects to the company's performance. Its operating cash flow has been consistently growing each year in the last three years, with the highest at Rs 212.56 crore. The net sales have also shown a positive trend, with the highest at Rs 463.82 crore and growth in each of the last five quarters. The company has also been distributing a higher proportion of its profits as dividends, with the highest dividend payout ratio at 34.57%.

On the other hand, there are some areas where Happiest Minds needs to improve. The profit before tax less other income (PBT) for the quarter has fallen by 26.9% compared to the average of the previous four quarters. The interest cost has also increased by 91.97% quarter on quarter, indicating increased borrowings. The company's ability to manage interest payments has also deteriorated, with the lowest operating profit to interest ratio in the last five quarters. The profit after tax (PAT) has also shown a negative trend, with a decline of 14.2% compared to the average of the previous four quarters.

Moreover, the company's income from non-business activities is high, accounting for 37.19% of its PBT. This may not be a sustainable business model in the long run. The earnings per share (EPS) for the quarter have also declined, creating lower earnings for shareholders. Additionally, the non-operating income for the quarter is at its highest in the last five quarters, which may not be sustainable.

Overall, Happiest Minds Technologies has shown a mixed performance in the quarter ending June 2024. While there are some positive aspects, the company needs to address its declining profitability and increasing interest costs to improve its financial performance. Investors are advised to carefully consider these factors before making any investment decisions.