“We’re either being pushed out or we’re losing revenue opportunities because customers are just waiting longer. We’re leaving money on the table because we don’t have the talent,” managing director Venkatraman Narayanan told Business Standard.
He added that although revenue losses have not reached alarming levels, the company has decided to ramp up its AI business headcount in “combat posture.” To support this, Happiest Minds will inject an additional $3 million into the business.
Recruitment will primarily focus on lateral or experienced professionals who require no training and can be immediately deployed to a project. AI business usage is currently around 60%, while company-wide usage was 82% at the end of December. The goal is to hire more staff and increase occupancy to about 70%.
The company expects to generate approximately $50 million in revenue over the next three years from its GenAI business. Last year, the company created a GenAI business unit that spans six industries to integrate new capabilities into customers’ products and services. Starting with 15 projects in the proof-of-concept stage, GenAI’s revenue is expected to reach approximately $8 million by the end of this fiscal year.
The number of innovative use cases has now increased to 32 with GenAI and Agent AI, with several projects extending across customers and industries.
“AI-driven productivity, core platform modernization, and automation programs are gaining momentum as enterprises focus on measurable outcomes and faster time to value. AI is no longer an add-on to customer conversations. Discussions are increasingly focused on embedding AI into core workflows and platforms, effectively managing AI, and extending it across the enterprise,” said Joseph Anantaraju, Co-Chairman and CEO.
Research from Information Services Group (ISG), a technology research and advisory firm, shows that while direct contributions from AI to P&L metrics such as revenue growth and cost reductions are weak, there are significant improvements in areas such as compliance and risk management.
Happiest Minds also announced financial results for the third quarter (October-November/Q3), where profits declined nearly 20% to Rs 40 billion due to one-off costs related to new labor laws. The provisional amount was 22 billion rupees. Revenue grew 11% to Rs 588 million.
The company also launched AI First as its 11th strategic transformation initiative supported by 11 strategic programs. 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-driven programs outpacing discretionary spending across the IT sector.
