“We are either getting pushed out or losing revenue opportunities because customers will wait only for so long. We are leaving money on the table because we don’t have the people,” Managing Director Venkatraman Narayanan told Business Standard.
While the revenue loss has not reached alarming levels, the company has decided to ramp up headcount in the AI business on a “war footing”, he added. To support this, Happiest Minds will inject an added $3 million into the business.
The hiring will primarily focus on lateral or experienced professionals who can be deployed immediately on projects, rather than requiring training. Utilisation in the AI business currently stands at about 60 per cent, compared with the company-wide rate of 82 per cent at the end of December. The target is to raise utilisation to around 70 per cent as more staff come on board.
The company sees a revenue potential of roughly $50 million from its GenAI business over the next three years. Last year, it established a GenAI business unit across its six industry verticals to integrate new features into clients’ products and services. It began with 15 projects in the proof-of-concept stage and expects GenAI revenue to reach about $8 million by the end of this financial year.
The number of transformative use cases has now grown to 32 in GenAI and agentic AI, with several projects scaling across customers and verticals.
“AI-led productivity, modernisation of core platforms, and automation programmes are gaining traction as enterprises focus on measurable outcomes and faster time-to-value. AI is no longer an add-on in customer conversations. Increasingly, discussions are centred on embedding AI into core workflows and platforms, governing it effectively, and scaling it across the enterprise,” said Joseph Anantharaju, co-chairman and chief executive officer.
Research by ISG (Information Services Group), a technology research and advisory firm, shows weaker direct attribution from AI to profit-and-loss metrics such as revenue growth or cost reduction, but greater improvements in areas like compliance and risk management.
Happiest Minds also reported its third-quarter (October-November/Q3) results, with profit falling nearly 20 per cent to ₹40 crore due to a one-time charge related to the new labour code. The provisional amount was ₹22 crore. Revenue rose 11 per cent to ₹588 crore.
The company also launched AI First as its 11th strategic transformation initiative, supported by 11 strategic programmes. AI First spans four areas — building advanced AI solutions, AI-native software development, IT service management, and cybersecurity. Growth was selective, with digital and AI-led programmes outperforming discretionary spending across the IT sector.
 "Venkatraman Narayanan, MD, Happiest Minds")