Happiest Minds Tech block deal: Shares fall 9%; Ashok Soota likely seller

Happiest Minds block deal news: Reports suggest Happiest Minds' Promoter and Executive Chairman, Ashok Soota, was looking to sell 6 per cent stake in the company through a block deal

Happiest Minds Technologies block deal: Happiest Minds Tech share price came under heavy selling pressure on Tuesday, June 25, after a massive block deal. Happiest Mind Tech share price tumbled 9 per cent to hit an intraday low of Rs 830.2 apiece, and was down 7.9 per cent at Rs 844.45 per share at 10:07 AM.

By comparison, the BSE Sensex index was up 0.2 per cent at 77,500 levels.

At 9:15 AM, 9.8 million shares changed hands on the counter on the BSE at a price of Rs 838 per share. Till the time of the writing of this report, 26.64 million shares had, together, changed hands on the NSE and BSE. The names of the buyers and sellers could not be ascertained immediately.

Reports, however, suggest Happiest Minds' Promoter and Executive Chairman, Ashok Soota, was looking to sell 6 per cent stake in the company through a block deal.

Promoter Ashok Soota, reports added, will not be allowed to sell any further stake for the next six months on the back of a lock-up period on any stake further held by him after today's large trade.

At the end of the March quarter, Ashok Soota held a 38.34 per cent stake in the company, shows the company's shareholding pattern.

Other promoters such as Veena Soota, and Deepak Soota held 0.02 per cent and 0.03 per cent stake, respectively.

Meanwhile, Ashok Soota Medical Research LLP, a promoter group, held 11.79 per cent stake.

Among public shareholders, Mutual Funds held 1.32 per cent stake, Insurance Companies 1.25 per cent, and FPIs 4.56 per cent.

Happiest Minds Technologies Limited provides next-gen IT solutions, leveraging cloud computing, social media, mobility, analytics, unified communications, and IoT. The company specialises in Digital Transformation, Product Engineering, Infrastructure Management, Security, Testing, and Consulting, serving industries like Retail/CPG, BFSI, Travel, Manufacturing, and Media.

In Q4FY24, it posted a revenue of Rs 420 crore, up 1.8 per cent quarter-on-quarter (Q-o-Q) in rupee terms, and 1.4 per cent Q-o-Q in USD terms. Profit, meanwhile, increased by 25 per cent on year to Rs 72 crore.

Ebit margin increased by 25 bps Q-o-Q to 16.4 per cent led by control on direct cost (higher offshore revenue mix).

"We expect gradual improvement in financial performance led by ramping up of recent deal wins. We expect Revenue/Ebitda/PAT to grow at 26.5 per cent/31.4 per cent/34.5 per cent over FY24-FY26E. We have revised up our FY25E/FY26E EPS by +0.1 per cent/4.5 per cent," said analysts at Centrum Broking in their post Q4 result report with an 'Add' rating.

Those at Systematix Wealth Management, meanwhile, have recently initiated coverage on Happiest Minds Tech stock with a 'Buy' rating and a target price of Rs 1,124.

"We estimate the company's revenues to grow at a CAGR of 26 per cent from FY24-FY26, to Rs 2,587 crore, with a healthy Ebitda margin of 23 per cent, and we expect Ebitda to grow at a CAGR of 32 per cent from FY24-FY26E to Rs 583 crore, and PAT to grow at a CAGR of 31 per cent from FY24-FY26E, reaching Rs 428 crore with a stable PAT margin of 17 per cent," their report projected.