New Delhi, February 10 IT firm Happiest Minds Technologies has reported a 19.56 per cent decline in consolidated net profit to Rs 40.3 crore for the December quarter, primarily due to a one-time charge related to new Labour Codes, as the company adopts an "AI First" strategy.
While the bottom line was affected by an exceptional impact of Rs 22.03 crore from the implementation of new Labour Codes, revenue from operations rose 10.69 per cent to Rs 587.56 crore compared with the same period last year.
Sequentially, revenue rose by 2.43 per cent, while profit fell by 25.39 per cent.
Adopting an "AI First" approach, the company announced on Tuesday that it is retiring its long-standing "Born Digital. Born Agile" tagline to "AI First. Agile Always."
Chairman Ashok Soota expressed confidence in this new direction and said, "When we announce the Q4 results, we will provide you with these figures and expect to show a significant increase in growth, exceeding the 10 per cent growth we have already committed for 4 years."
Starting from Q1 FY27, Happiest Minds will formally report its AI-led sales, encompassing both traditional AI and Generative AI offerings. The company plans to grow its AI/GenAI team to 1,000 by the end of FY27.
During the quarter under review, the firm added 11 new clients, bringing its total to 297 as of December 31, 2025. The company's headcount stood at 6,548 at the end of the quarter, compared with 6,554 in the previous three-month period.
"In Q3, we saw customer conversations becoming more decisive. Enterprises are moving beyond experimentation and are increasingly focused on embedding AI into core workflows and platforms, where the business impact is clear and scalable."
"The demand environment remains selective, but increasingly intentional. Customers are not cutting technology spending indiscriminately; instead, they are prioritizing initiatives where the business case is well defined. AI-led productivity, modernization of core platforms, and automation programs are seeing traction as enterprises focus on measurable outcomes and faster time-to-value," said CEO Joseph Anantharaju, adding that AI is no longer an add-on in customer conversations.
Increasingly, discussions are centred on how AI can be embedded into core workflows and platforms, governed effectively, and scaled across the enterprise.
Anantharaju said that the company's Agentic AI approach, which combines coding agents with human developers in a hybrid delivery model, is resonating well, enabling customers to address technology debt in a more cost-efficient and lower-risk manner, while also delivering meaningful productivity improvements.
"We are seeing interest in this approach not only from enterprises, but also from private equity firms and their portfolio companies," he said.