The 31 reports from 11 analysts offering long term price targets
for Persistent Systems Ltd. have an average target of 1910.45. The consensus estimate
represents a downside of -25.87%
from the last price of 2577.00.
Background: Persistent Systems is one of the leading outsourced product development (OPD) companies in India. Revenue from business offering mix: Services (81.9%) & IP led business (18.1%). The company has industry expertise in ISV (41.7%), Enterprise (42%) and IP Led (16.3%). The company's business is spread across North America (81.1%), Europe (8.8%), and RoW (10.1%).Company earns revenue from global delivery centers (30.5%), India (51.4%) and IP Led (18.1%). Total active clients stood at 1000+ including services and IP led business. Company's top client accounts 18.5% in revenues, top 5 (37.8%) and top 10 (47%)....
Persistent Systems: We maintain BUY on Persistent Systems (PSYS). It is among our top picks in the sector, based on industry-leading growth profile, improving deal wins, and strong 4Q performance (despite Alliance seasonality). PSYS' growth leadership is premised on (1) strong new deal wins (USD 237mn new win ACV in 2HFY21) and increasing focus on client mining with larger deals stabilising the portfolio churn, (2) acceleration in Alliance business ahead, supported by portfolio and GTM strategy of T1 account, (3) technology differentiation and continued focus on partnerships (Salesforce, AWS, Red Hat) and sourcing for growth thrust, and (4) leadership augmentation (Salesforce, Europe, BFSI delivery). PSYS' operational improvement in FY21 is sustainable with an upward bias supported by efficiencies, utilisation, and offshore. Our target price of INR 2,350 values PSYS at 25x Mar-23E, supported by 26% EPS CAGR over FY21-23E and >40% RoIC. Zensar Technologies: Zensar's revenue continued to be under pressure (-3.4% QoQ CC) but its fall was in line with our estimate. The decline was broad-based with major verticals like Hi-Tech (top account), Consumer (Retail) and Banking (Project closure) registering a sequential drop in revenues. The company has been struggling to grow over the past five quarters and revenue declined by 12.0% YoY CC in FY21. Under the new CEO, the company is going through a complete strategy reset, with a clear focus on reviving growth. The emphasis will be on increasing the partnership ecosystem (hyperscalers), investing in the sales engine, and optimising talent. The company will also look for acquisitions to build capabilities in...
We were impressed by PSYS strong performance in 4QFY21 USD revenue growth of 4.6% QoQ (100bp above MOFLSe) and 16.9% EBITDA margin (down 10bp QoQ despite a one-month wage hike impact). Order bookings of USD246m (1.6x book-to-bill ratio) in 4QFY21 points to good growth visibility for FY22E, especially with management commentary that the TCV run-rate of over USD200m will result in a quarterly revenue growth of 4.5-5% in USD terms. PSYS has reported best-in-class growth in the TSU business (18.4% YoY)...
Consistent expansion in EBIT margin +42 bps QoQ to 13.2% in 4QFY21 and +290 bps YoY to 12.1% in FY21. There is further scope for expansion in margins led by cost optimization and revenue acceleration Persistent has not only reported excellent performance in 4QFY21 (+4.6% QoQ USD) but also shown strong consistent revenue growth (+12.8% YoY USD) and margin expansion (+290 bps) throughout the year. Growth in 4QFY21 was led by strong growth in Services (+8.2% QoQ USD) which offset...
The company has won a total contractual value of US$246.5 million of which annual contractual value is US$200 million (implying a book to bill ratio of 1.3x) and net new of US$96.9 million. This, coupled with multi-year deal won by the company, will help improve its revenues growth (the company aspires to achieve 3.5-4% QoQ growth). The company has hired 1618 and 1173 in the past two quarters, respectively, with increasing large deal size representing robust growth opportunity in coming quarters. In addition, Persistent's focus on client mining, scaling up new clients, expanding...
We recommend a BUY and value the stock at 24x P/E to its FY23E earnings of Rs. 95.3/ share which gives a TP of Rs. 2,325/share, an upside of 14 from CMP.
Background: Persistent Systems is one of the leading outsourced product development (OPD) companies in India. Revenue from business offering mix: Services (81.9%) & IP led business (18.1%). The company has industry expertise in ISV (41.7%), Enterprise (42%) and IP Led (16.3%). The company's business is spread across North America (81.1%), Europe (8.8%), and RoW (10.1%).Company earns revenue from global delivery centers (30.5%), India (51.4%) and IP Led (18.1%). Total active clients stood at 1000+ including services and IP led business. Company's top client accounts 18.5% in revenues, top 5 (37.8%) and top 10 (47%)....
For the first time the company reported its order book, which is US$302 million (book to bill of ~2x) of which US$175 million is net new. We believe this is mainly due to traction in multi-year large deals in services and IP led segment (benefits of which will be reflected in Q1FY22E). The company has also hired 1618 employees of which 70% are laterals representing robust growth opportunity in coming quarters. In addition, Persistent's focus on client mining, scaling up new clients, expanding European geography (from 9% to 15-18% in next three four years) and improving its alliance business...
Persistent Systems headquartered in Pune, India offers specialized services in cloud computing, digitization, business analytics etc. Persistent has established strong leadership in few verticals viz., Enterprise software, Consumer Software, Innovation Services etc.
Background: Persistent Systems is one of the leading outsourced product development (OPD) companies in India. Revenue from business offering mix: Services (83.7%) & IP led business (16.3%). The company has industry expertise in ISV (41.7%), Enterprise (42%) and IP Led (16.3%). The company's business is spread across North America (80.2%), Europe (8.8%), and RoW (11%).Company earns revenue from global delivery centers (33%), India (50.7%) and IP Led (16.3%). Total active clients stood at 1000+ including services and IP led business. Company's top client accounts 19.2% in revenues, top 5 (41.5%) and top 10 (49.9%)....
Persistent reported inline revenue growth of 3.8% QoQ (Ple:3.2%) with strong performance from services business grew 5.3% QoQ to $114mn on 7.0% volume growth & IP-led revenue declined 3% QoQ to $22.1mn due to lower IP resale revenue. EBIT margin expanded by to 12.1% (Ple:10.9%) Gross margin expansion (+170 bps) was partially offset by higher SG&A; (-70 bps). Management guided current EBIT margin (12%) as sustainable inspite of salary hike in Nov-2021. Management expects to maintain EBITDA margin in...
The company's greater than US$5 million clients has increased by five over the past two quarters led by its focus on mining existing clients and winning multi-year large deals. In the current quarter, Persistent won four large multiyear deals in technology & emerging companies and financial services. This is expected to lead to healthy annuity revenues in coming years. In addition, the company's focus on improving its alliance business and improving European revenues in services segment will help boost overall revenues. This coupled with Persistent's partnership with Red Hat, strong salesforce partnership, acceleration in digital revenues in a post Covid-19 world and...
Persistent Systems: We upgrade Persistent Systems (PSYS) to BUY (ADD earlier) due to a structural pivot towards growth acceleration, following underperformance in FY16-20 period. PSYS' relative outperformance in FY21 and growth acceleration (20% EPS CAGR over FY20-23E) is driven by (1) recovery in Technology Services (deal sourcing, partnerships, client mining, and improving annuity), and (2) better operational rigour and business synergies improving the operating profile translating into 22% FCF CAGR over FY20-23E. Revival in Alliance business (Red Hat, Dassault) and prospects of better capital allocation (cash ~19% of M-cap) are value-accretive triggers. Our target price is Rs 1,520, based on 21x Sep-22E EPS and supported by 20% EPS CAGR, >35% RoIC. ICICI Lombard: While FY21E is expected to be a muted year in terms of top-line growth, we believe ICICIGI will deliver lower CORs. We remain cautious on health claims as a second wave of COVID-19 may result in significant increase in claims. Additionally, changing regulations in motor are expected to drive down both claims and tariffs, creating supernormal profitability in the short term. We believe that this period (of supernormal profitability) will be short-lived, as we expect IRDAI to restrict TP pricing growth, thereby restricting profitability. We believe the market is not factoring this risk; accordingly, we rate ICICIGI a REDUCE with a target price of Rs 1,141 (DDM derived Sep-22E P/E of 26.4x and a P/ABV of 5.2x).
Persistent reported sequential revenue growth of 3.9% (USD) and an EBIT margin of 12.1% (~170bp expansion), ahead of estimates. Growth was driven by the Services business, partly offset by the IP portfolio due to seasonality in the Reseller business. Broad-based performance was encouraging. Healthy growth in Services despite a high base indicated steady progress on the turnaround. Management commentary further implied a healthy deal pipeline in the Services business. We expect this vertical to continue to deliver even with...
We retain our Buy rating on Persistent Systems Limited (PSL) with a revised PT of Rs. 1,450, as we expect strong earnings growth over FY2021-23E. Q2 numbers beat estimates on all fronts; deal signings remained strong for all...
$136mn (DE 2.9%). OPM improved by 170bps QoQ to 12.1% (DE 10.6%) driven by sustained traction in TSU business (up 4.1% QoQ). Commentary turns further confident as the Newly instated CEO expect the turnaround in the Alliance business in FY22e both on growth as well as profitability, while expects momentum in the TSU business to continue to clock healthy growth led by robust deal-win momentum. Expect sustenance of Profitability despite impending wage hikes given potential for improvement in Alliance biz (offshore shift), efficiency in...
