Choice Institutional Equities has maintained a 'Buy' rating on Happiest Minds Technologies with a target price of ₹375. The brokerage highlights the company's FY27 growth guidance and AI-led strategic shift as primary drivers, though investors are keeping a close watch on macroeconomic pressures and the upcoming ITC Infotech merger.
Choice Institutional Equities has reiterated a 'Buy' rating on Happiest Minds Technologies, setting a target price of ₹375. The brokerage’s outlook is driven by the management's reaffirmed FY27 growth guidance, which projects a 12.5% exit growth rate. While this target remains above some market estimates, it reflects analyst confidence in the company’s medium-term internal performance targets.
The company recently reported Q2 FY27 revenue of ₹645 crore, marking a 12.5% growth compared to the previous year. Operating margins stood at 18.5%, with a net profit of approximately ₹62 crore for the quarter. These results arrive as the company continues to execute its 'Project Reimagine' initiative, which aims to shift service models toward outcome-based delivery supported by proprietary AI platforms like SecAI Genie.
For investors, the most significant long-term event remains the proposed merger with ITC Infotech. The process is reportedly on track, with completion anticipated by September-October 2027 and a planned listing of the combined entity in November 2027. Under the agreement, the share swap ratio is set at 25 shares of ITC Infotech for every 81 shares of Happiest Minds. Notably, ITC Infotech is acquiring a ~22.1% promoter stake in the company at an average price of approximately ₹395 per share, a figure that is higher than the current brokerage target.
Despite the strategic developments, the company operates within a challenging macroeconomic environment. Broader uncertainty in key markets such as the US and Europe has led clients to be more selective with discretionary IT spending, which has in turn caused deal conversion cycles to lengthen. Additionally, the company continues to manage persistent weakness in its legacy US EdTech vertical.
Moving forward, the primary monitorables for stakeholders include the progress of regulatory approvals from the NCLT and CCI regarding the ITC Infotech merger. Investors may also track the company’s ability to maintain its margin profile and execute on its 'AI-first' strategy while navigating the global slowdown in IT spending.