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    Happiest Minds slips 3% after stellar debut on Thursday; what’s next?

    Synopsis

    Yash Gupta, Equity Research Associate, Angel Broking said, “We had recommended a “Subscribe” to Happiest Minds IPO. Post stellar listing, we would recommend to book profits. At current levels, the stock is trading at 54x FY2020 EPS, which is significantly higher than industry peers.”

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    The IT services company’s market valuation is hovering at around Rs 5,309 crore on the BSE.

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    Shares of Happiest Minds declined over 3 per cent in Friday’s trade after witnessing robust gains on the listing day on Thursday.

    The stock ended 3.38 per cent lower at Rs 358.45 on the BSE.

    However, the scrip opened the day at Rs 375 against the previous close of Rs 371.

    Yash Gupta, Equity Research Associate, Angel Broking said, “We had recommended a “Subscribe” to Happiest Minds IPO. Post stellar listing, we would recommend to book profits. At current levels, the stock is trading at 54x FY2020 EPS, which is significantly higher than industry peers.”

    He further added that digital business will be the key growth driver for the IT sector and Happiest Minds is positioned to take full benefit of the same as the company derives 97 per cent of its revenues from digital services.

    On Thursday, Ashok Soota-promoted information technology firm Happiest Minds made a stellar debut on bourses, with the scrip registering a 123 per cent listing day gain amid high turnover.

    The scrip witnessed a combined trading volume of over 6.25 crore equity shares against the total issue size of 4.22 crore shares.

    Commenting on the further movement of the digital solutions provider, Vinod Nair, Head of Research, Geojit Financial Services said, “The premium listing of the stock may limit the performance in the short term. However, it is a long term growth stock due to the high growth business and strong management.”

    With the stellar listing, the company has joined the likes of Avenue Supermarts and IRCTC, which have also in the past debuted with over 100 per cent gains.

    The IT services company’s market valuation is hovering at around Rs 5,309 crore on the BSE.

    Earlier, the Rs 702-crore initial public offering of Happiest Minds Technologies garnered a massive response from investors as it was subscribed a whopping 151 times.

    “The majority of the business will not be impacted by Covid and thus the premium valuation will stay,” said Nair.
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