Due to an unexpected expense of Rs.6.1 crore, IT services provider Happiest Minds Technologies Ltd reported a 29 percent year-on-year fall in net profit to Rs.35.7 crore for the fiscal first quarter ended June (Q1 FY22).

However, at the heels of a broad-based growth, its revenues for the quarter increased 38.2 percent year over year to 244.6 crore. In US dollars, revenue increased 41.4 percent year over year and 9.6 percent sequentially to $33.1 million in April-June.

During the quarter, the company attracted 18 new customers, bringing the total to 180 as of June 30.

As the industry's demand grows, the attrition rate jumped to 14.7 percent in the March quarter, up from 12.4 percent in the previous quarter. During the quarter, it hired 310 new people, bringing the total number of employees to 3,538 as of June.

On the bright side, its revenues rose as high as 97 percent within digital, which appears as the highest among Indian IT services competitors. Cloud accounts for around 42 percent of digital revenue in digital.

The company, which went public on the BSE and NSE last year, reported a net profit of Rs 50.18 crore in the previous financial year.

Its revenue, on the other hand, increased by 41.4 percent to Rs.331.52 crore in the quarter under review, up from Rs 234.44 crore the year before.

“We've started the fiscal year on a strong note, with strong growth and performance. Despite supply-side difficulties and the pandemic situation, our operations and delivery remain resilient. Our financials this quarter have an extraordinary charge on account of fair valuation of warrant liability in our balance sheet", explained Venkatraman N, MD and CFO, Happiest Minds Technologies.

He went on to say that the company's increasing profitability implies a higher effective income tax rate.

"In comparison to the same quarter last year, when we enjoyed a considerable tax credit due to the use of a 'deferred tax asset,' this quarter we have a full charge of expenses in line with our profits. I am pleased to say that we were able to settle an earlier reported employment discrimination complaint in the United States, resulting in a Rs 2 crore credit to our P&L”, he added.

“We were able to have a positive performance in this quarter thanks to our market positioning as a go-to digital partner and the demand environment continuing to be buoyant. Our net headcount addition was significant as we onboarded 310 Happiest Minds, which underscores our ability to attract and retain good talent with our compelling people engagement programs", stated Joseph Anantharaju, executive vice chairman, Happiest Minds.