Happiest Minds Technologies said concerns about AI agents hurting IT services pricing are premature, adding that deploying such tools still requires integration, workflow and security work from services firms.
Speaking to TNIE, the management of Happiest Minds said while AI and generative AI (GenAI) are becoming part of everyday technology work, they are not yet disrupting the core economics of IT services in the way some market fears indicate.
Addressing recent volatility in technology stocks triggered by the launch of agents such as Anthropic Claude, the company said statements around autonomous agents replacing large parts of IT services need to be examined more closely.
“All the transactions that these agents would conduct and the data they generate have to go somewhere. The current systems being used also need that data to be exposed and utilised. There is a security element involved, as well as a process and workflow element,” said Joseph Anantharaju, Co-Chairman & CEO of Happiest Minds.
In addition, workflows, processes and compliance requirements need to be built around these tools before they can be used at scale. This, he said, creates fresh work for IT services firms rather than eliminating the need for them. Anantharaju added that some of the recent statements from global AI companies were “a little bit of a self-serving statement”, aimed at putting their platforms at the centre of attention. In practical terms, he said, customers still need service providers to make these technologies usable in real business environments.
Further, Venkatraman Narayanan, MD of Happiest Minds, said that their customers are not asking for people to be replaced by AI. Instead, most adoption so far has focused on improving productivity. The company said around 75% of its customers are already using productivity tools such as coding assistants on projects. These tools are now moving from simple adoption to measurement, with customers tracking output and efficiency gains.
A newer trend is the discussion around hybrid models where coding agents work alongside human developers, particularly for technology modernisation and reducing legacy technology debt. However, these discussions are still largely at the proposal stage, with limited full-scale implementation so far, he said.
Additionally, Narayanan said it is easier to train people on AI tools than to replace them, as employees already understand the platforms, processes and industry context in which they operate. Happiest Minds said it has already trained 75–80% of its workforce on at least one productivity tool and expects all employees to be conversant with such tools by the end of the current financial year or early next year.
On revenues, the company said generative AI services are currently a small but growing part of the business. It expects to generate about $8 million from GenAI by the end of FY26, which translates to roughly 3.5–4% of total revenue.
However, management said AI and GenAI are increasingly embedded across projects in infrastructure management, security, product engineering and analytics. The company is now reviewing projects one by one to identify what portion of revenue can be classified as AI-led. It expects to share a clearer picture by the fourth quarter and said the final number is likely to be “quite substantial”.
In Q3, the consolidated net profit fell 25.4% QoQ to Rs 40.30 crore due to the new labour code impact. Meanwhile, revenue rose 2.4% to Rs 587.56 crore in Q3 FY26 as compared with Q2 FY26. Operating margin improved by 3.6% to Rs 100.87 crore in Q3 FY26 from Rs 97.33 crore in Q2 FY26.