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Happy Square Outsourcing Services Limited reported a robust H2 FY26 with total turnover of INR66.51 crores, marking a strong 35.92% year-on-year growth. Profit After Tax (PAT) for H2 FY26 also saw significant growth of 27.20% year-on-year, reaching INR4.21 crores. For the full fiscal year FY26, the company achieved a total turnover of INR109.88 crores, representing a 12.49% year-on-year increase, with an EBITDA of INR7.86 crores and PAT of INR5.98 crores.

The company is heavily investing in AI and technology, including the purchase of OpenAI and Claude, and developing an in-house master CPU and Veera AI chatbot. This strategic shift aims to transform the company into a tech-driven solution provider, moving beyond traditional staffing. While these investments temporarily impacted FY26 EBITDA margins, management expects profitability to increase, targeting a 9% EBITDA margin by FY28, once 100% of the AI investment is completed by FY27.

Management has set an ambitious target of 80% revenue growth for FY27. The company is actively pursuing new government contracts, with a significant pipeline including an L1 bid for INR21 crores from the Rajasthan government expected within 15 days, and another INR15 crores order in July. Cumulatively, the company anticipates receiving INR35 crores in work orders within the next 50-60 days. Long-term, the company targets crossing INR200 crores and INR300 crores in turnover by FY28.

Happy Square Outsourcing Services Limited is strategically shifting its client mix, aiming for a 50%-50% split between government/PSU and large corporate clients in FY27, compared to the previous 30%-70% split. The company has also initiated international expansion, having received a license and started overseas operations this quarter, with plans for 100% operations in the European market by the first half of the next fiscal year, following an MOU with a European country.

The company is repositioning itself from a traditional staffing firm to a comprehensive tech-driven solution provider, leveraging AI for efficient recruitment, bidding on government contracts, and managing a large data bank. Currently, 35% of its AI product is launched, with tools like Veera AI assisting candidates and clients. The company also plans to monetize its payroll and attendance app services, currently offered free, starting from the next quarter.

Beyond traditional staffing, the company is focusing on high-growth segments driven by technology. This includes a strong vision for data centers, the EV segment, new petroleum replacement technologies like LNG, solar vision systems, and robotic technology. The company aims to integrate these technologies into its facility management services, further diversifying its offerings and leveraging its tech-driven approach.