Persistent Systems (PSYS) reported below-par Q3FY19 revenues but a beat on margins. Digital business returned to growth after two quarters of QoQ decline. Despite onsite constraints, PSYS benefited from higher billing rates and a better offshore mix, which fueled EBITDA margins (+250bps QoQ). We upgrade the stock from REDUCE to ADD on attractive valuations post a 30% price correction since we initiated coverage in Jul'18. Baking in higher margins,...