Is Happiest Mind Really A multi-bagger Or Overvalued Share
While the stock selection is not easy, for those inclined to persist and master, it’s workable to buy shares in good companies and create amazing returns. When an investor finds a multi-bagger (200% jump in a stock), it makes a big difference to their portfolio.
One such Example is Happiest Mind with over 301 % returns in the last year.
First thing first, we would like to clarify, that Happiest Mind hasn’t announced officially Bonus Shares. So, It’s all rumors but nothing else.
Biggest IPO Listing
In September 2020 Happiest Mind launched Its IPO at a price band of ₹ 165 and the IPO was subscribed 151 times. Share was listed at ₹ 351 a whopping 111% gain on day one. This was the biggest listing gain in the current decade.
Let’s do, Fundamental analysis, where we will cover the company and the management of Happiest Mind. Its competitive strength, future growth, and financials.
Based on the analysis we will decide if Happiest Mind is fundamentally strong or not. Then we will do the valuation analysis of Happiest Mind to decide if it is worth investing in the company at its current levels.
Established in 2011, Happiest Mind is an IT company that specializes in digital transformation, infrastructure security, and product engineering solutions.
So basically, the digital transformation includes services like IoT, that is the Internet of things, cloud computing, big data analytics, process automation, artificial intelligence, blockchain, etc.
If you look at the tagline of Happiest Mind, it says “born digital-born agile” now let me help you understand. What exactly does it mean. Clearly when it says born-digital Happiest Mind is focused on digital business that is the disruptive technology of the world that is in high demand with a bright future in fact 97% of the business of Happiest Mind is from digital services.
When it says born agile it means quick to adapt. So, agile is a methodology that essentially means being active and doing things in pieces. That is also known as a sprint rather than doing everything together it is very important for a business to be agile because in technology you need to unlearn and relearn and adapt to changes quickly. In fact, more than 90 percent of the business of the company is from agile methodology.
In terms of geography, 72.2 % of the business of Happiest Mind is from the US. 10.6 % is from Europe and only 13.4 % is from India.
Now let me discuss some of the key metrics that are specific to the IT sector first is utilization percentage.
So, utilization basically means that out of 100 employees how many are on billable rules, where the client is paying money for the employee.
It is a very important KPI in the IT sector and the higher the utilization better would be the profitability. Happiest Mind utilization percentage is very good you can see that the onsite utilization is about 75% and the latest onsite utilization is 81.6 % which is great. Offshore utilization is consistently above 95%.
The attrition rate is also in control now.
Now let’s look at the promoter profile of Happiest Mind, Mr. Ashok Sutta has IT industry experience of more than 30 years in India, during his initial days he served as a president of Wipro infotech
between the year 84 to 99. So, he’s into the IT sector even before many of us were born during that period Wipro IT business grew from 2 million dollars to 500 million under his leadership, that’s 250 times jump in revenue.
Mr. Sutta, also co-founded IT giant Mind Tree in 1999 which has a market cap of 33,000 Cr now. In 2011 Mr. Sutta co-founded Happiest Mind. Now you can imagine the kind of leadership and promoter pedigree we are talking about for Happiest Mind company has a strong Focus on high governance with a market cap of around 10,000 Cr. Overall, on the company and its business, I would rate it 10 on 10.
This article by Moneymoksh is generic in nature. We give analysis based on historical data and analyst predictions only using an unprejudiced methodology and our blogs aren’t intended to be financial advice. It doesn’t constitute a recommendation to buy or sell any stock and doesn’t take account of your objectives, or your monetary situation. We aim to bring you long-term focused analysis run by fundamental data. Note that our analysis may not factor in the ultimate price-sensitive company notifications or qualitative material. Simply Moneymoksh has no position in any Shares/stocks mentioned.