(PTI) IT company Happiest Minds Technologies has said customers are now prioritising initiatives that yield strategic benefit or lead to huge differentiation in the market amid macro headwinds, but that there has been no major pullback.
Happiest Minds is also looking for "right companies" to acquire in the digital space and scouting for opportunities. Such an acquisition could be driven by several considerations including augmenting presence, for gaining new competency, or for large client in a particular vertical.
Joseph Anantharaju, Executive Vice Chairman of Happiest Minds Technologies said the customers are prioritising initiatives or projects that have either a strategic benefit or that can give huge differentiation in the market and that they are looking at the timeframe for returns "very closely".
These deals typically tend to be digital initiatives.
"We've not seen any huge pullback or change at a broad level," he told PTI. According to the company, customers are being "little bit more cautious" in Europe than in the US market.
"But if you can, in customers' environment, identify the right use cases, people are continuing to spend and invest...with some of these digital initiatives and the world becoming more global, you have to invest in these because your markets are typically not limited to just Europe and you will be competing with companies in other geographies as well," Anantharaju explained.
Several large and mid tier Indian IT companies announced their Q3 report card over the last fortnight, against the backdrop of analysts' gloomy prognosis around slowdown in advanced economies and fear of geopolitical flare-ups.
While Indian IT companies have raised guard on global uncertainties and choppy verticals, outlining a cautious narrative, they are largely hopeful that costs as well as business considerations will continue to drive tech demand among clients.
Last week, Happiest Minds reported a net profit of ₹57.58 crore for December quarter, a growth of 17.7 per cent year-on-year but a decline of 3.1 per cent when seen sequentially.
Total income stood at ₹374.7 crore for Q3FY23, rising 28.2 per cent on-year and 4.3 per cent quarter-on-quarter. Revenue in constant currency grew 2.8 per cent sequentially and 22.6 per cent year-on-year.
The company's operating revenues in dollar terms stood at USD 45.3 million (growth of 2.1 per cent q-o-q and 19.8 per cent y-o-y) Happiest Minds said customers continue to keep a close watch on the evolving macroeconomic parametres. Another change triggered by global uncertainties pertains to companies releasing budgets in a quarterly timeframe, as opposed to front-loading the costs.
"Not all of them, but many of them...they are releasing budgets in quarterly timeframe so they have the ability to act quickly if economic conditions change," Anantharaju said.
Asked if the company is keen on acquisitions at time when global uncertainties have adjusted valuations, Happiest Minds' MD and CFO Venkatraman N said: "Yes, we are in the market. We are looking for the right companies to acquire in the digital space".
"We look at companies with a good offshore presence," he added.
Happiest Minds had 4,611 employees at the end of December quarter, with net 30 additions. The attrition rate stood at 20.9 per cent (12-month trailing). It had 230 clients, with nine additions during just-concluded third quarter.