Mid-tier IT firm Happiest Minds Technologies plans to acquire digital companies to fuel growth, as it aims to reach its revenue target of achieving $1 billion by 2031.

The company is looking to acquire three to four profitable digital companies in areas such as low-code no-code and Artificial Intelligence(AI), among other areas. 

Venkatraman N, MD and CFO told businessline, “We would like to acquire companies that come with a good customer base, a vertical of choice and focused product engineering services among other factors. We are looking at companies we can grow with at a faster pace than we would individually.” 

The company so far has not been able to close the acquisitions in the first quarter, and continues to look out for opportunities, it said. 

The company in Q1 recorded a sequential rise of 1.2 per cent marginal sequential rise in net profit at ₹58.33 crore. On a year-on-year (y-o-y) basis, the profits rose 3.5 per cent. Revenues stood at ₹390.87 crore, a 3.4 per cent rise on a q-o-q basis, and 18.8 per cent on a y-o-y basis. 

Happiest Minds retained its guidance at 25 per cent. Margins dipped on a q-o-q basis from 26.2  per cent last quarter to 25.2 per cent in Q1. Attrition saw a dip from 19.8 per cent in fourth quarter to 16.6 per cent in the first quarter. Employee headcount increased from 4,917 to 5,048 sequentially. 

Venkatraman noted that the dip in margins was due to on-site wage expenses and reversals that happened previously. The company aims to bump its utilisation rate to 78-79 per cent, from 74.6 per cent currently which would be a margin lever. 

Happiest Minds also intends to strengthen its presence in geographies beyond America. Joseph Anantharaju, Executive Vice Chairman said the company has received traction in Germany in the last 12-18 months, and intends to expand further in the region along with the Netherlands. It is also open to exploring markets such as the Nordics, Latin America, and Africa “We want to take a sectoral view into each of these countries as we go forward, in Germany for example we are looking manufacturing and industrial companies,” Anantharaju said.