05 Nov , 2021 By : Kanchan Joshi
Happiest Minds Technologies aims to bring down its dependency on the US to under-65% on a sustainable basis. “However, as the company reduces its dependency on the US for revenue, the same will go up elsewhere," as senior official said.
The US is the single largest revenue head for all domestic software companies mostly because it is the most tech-savvy market with the highest adoption levels. On an average, the US gives 48% of the revenue to domestic software companies, down from 55-60 percent earlier. For Happiest Minds, that is close 70% on average barring in Q2 when it slipped to 66%.
"We used to have around 80% of our revenue from the US alone. We've been diversifying our revenue pool to lower our revenue dependency on that market. In the September 2021 quarter, it was down to 66% from 77% a year ago. But we know such a drastic drop is not possible nor it is sustainable," Joseph Anantharaju, executive vice-chairman of Happiest Minds, told PTI .
The idea is to cap the revenue share from the US at under-65% on a sustainable basis over the next few years, Anantharaju also told PTI.
Meanwhile, Venkatraman N, Managing Director and CEO, said, "The sharp drop in the US revenue share in Q2 was because of a big one-time deal from a West Asian client which also boosted the rest of the world revenue share to over nine per cent from 2.6% for long, and also a multi-million deal from a German engineering company."
The company is also on course to win a few more large West European deals, primarily from Germany over the coming quarters, he said.
"We could close a large German deal because we got a good opening to the West European markets after we bought the Austrian PGS which sells its services as Pimcore in Q1," Venkatraman said.
As the company reduces its dependency on the US for revenue, the same will go up elsewhere, with European share touching 14% from 11% now on the back of German inductions, and that of India retaining the current 13% share going forward from 10.9% last year, he said.
However, Anantharaju said, “We want to maintain the European share at 14% or even lower because of tough marketing conditions there."
He added that the company would like to focus on Europe but that will not be at the cost of defocusing the US, which is an easier market to win when it comes to marketing. "Therefore the US will continue to grow and we want it to grow further."
Last week, Ashok Soota-founded firm reported an over 30 per cent spike in net income at Rs44.44 crore for the September 2021 quarter, while the total income rose to Rs274.12 crore from Rs187.91 crore.
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