Hem Securities Places Buy On Small Cap IT Stock At Target Price of Rs 1,050

A prominent stock broking firm, Hem Securities placed a buy rating on the stock of Happiest Minds Technologies, a small-cap IT company. The stock broking firm feels that the stock can rally up to 15% to reach a target price of Rs 1,050 per share.

Happiest Minds Technologies was founded in 2011 as a global IT service-providing company with headquarters in Bangalore, India. It has a market capitalisation of Rs 13,411.58 crores. The company provides a wide range of services, including digital transformation, cloud computing, artificial intelligence, and cybersecurity.

The small-cap IT company posted strong profitability for Q4FY23. The consolidated revenue was at Rs 377.98 crores, up 25.75% YoY and up 3.03% QoQ. The profit after tax was reported at Rs 57.66 crores, up 10.65% YoY and up 0.14% QoQ.

Management Guidance

As per the research report of Hem Securities, the management has maintained its revenue guidance of 25% for FY24 and expects EBITDA to remain in the range of 22-24%. Further, the management expects to add 1300 employees for FY24 including ~450 freshers.

Additionally, the company has acquired a 100% stake in SMI Ltd which will strengthen its presence in the healthcare vertical, the broking firm pointed out

View & Rating

As per Hem Securities, Happiest Minds is well positioned to grow led by strong revenue growth guidance, a healthy deal pipeline, an increasing client base, expanding margins through operational efficiency, and the acquisition of new businesses.

Management is also quite positive about the business and clearly stated that their business has negligible impact due to the banking crisis in the US and other macro factors.

"We initiate a "BUY" rating on the stock and value the stock at 47.5x FY25E earnings to arrive at the target of Rs 1050", added the stock broking firm.

Scrip Movement

The stock price of the IT company closed marginally down by 0.16% to Rs 916 per share on an intraday basis. In the last one year, the share price has rallied by 5.15% while in the last three years it has surged massively by 155.54%.

Disclaimer

The stock has been picked from the brokerage research of Hem Securities. Information Technologies, the author or the brokerage house are not liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.