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    Happiest Minds Tech expects attrition rate to go up further; targets employee addition at Q1 run rate

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    Happiest Minds Tech expects attrition rate to go up further; targets employee addition at Q1 run rate

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    It’s been a year since Bengaluru- based IT services provider Happiest Minds Technologies made its IPO debut on the bourses. To discuss the company’s outlook, CNBC-TV18 spoke to Venkatraman Narayanan, MD and CFO, and Joseph Anantharaju, executive vice chairman & CEO of Product Engineering Services at Happiest Minds.

    It’s been a year since Bengaluru- based IT services provider Happiest Minds Technologies made its IPO debut on the bourses. To discuss the company’s outlook, CNBC-TV18 spoke to Venkatraman Narayanan, MD and CFO, and Joseph Anantharaju, executive vice-chairman & CEO of Product Engineering Services at Happiest Minds.
    On demand, Narayanan said, “The demand scenario has only gotten better from where we were at the end of the first quarter. Things are looking very good with respect to customer additions or growth of existing customers as well. So, demand is good.”
    On supply side challenges, he said, “Supply situation is not as good, but we are managing to hold on with employee net additions of about 300 in the first quarter. As I have been mentioning, we are trying to keep up similar numbers. I would be happy if we did similar numbers for the next three to four quarters, given the demand scenario.”
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    On deals pipeline, Anantharaju said, “If you look at it from a vertical perspective, most verticals that we are operating in seem to be showing strong demand growth with customers initiating or implementing digital transformation initiatives. A few of them may be a little ahead or having more spent, like edutech, which continues to be strong for us; high tech, retail, we are seeing a good spend with the whole e-commerce move. Again, with the media space, the move to digital media, we are seeing quite a bit of initiatives out there.”
    He further added, “In terms of technologies, I would say cloud is almost a done deal now. Most of our customers are operating on the cloud, and a lot of work is happening around leveraging artificial intelligence, analytics. One thing we have noticed in the last few months is that more customers are looking at more automation. We have seen a strong uptick on automation as well, from a technology angle.”
    On attrition, Narayanan said, “If I were to take a stab and make a prediction, I think things are going to get a little bit worse and then start improving. Because you see, there is always a slow build-up when it comes to attrition. The pipeline then slowly builds upon people moving out looking for newer opportunities that are on offer while we keep adding and backfilling the opened positions. So both of this is happening at the same time. So it is likely to get worse. I would say from our numbers of 15 percent last quarter, it is likely to increase and then we will be able to stabilise it over a period of time.”
    On margins, Narayanan said, “Just to give you a background, 23 percent EBITDA was after adjusting for one-time cost that I talked about in detail in the last quarterly call. If you adjust that, we are at about the same 25.6-26 percent number that that we have been doing for the last four quarters. That said, I have always been cautious in guiding on the margin front, I have been saying that sustainable margins should be in the range of about 22 to 24 percent.”
    For full management commentary, watch the video.
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