Persistent Systems Ltd. share price target

Company reported $345.5 million in revenues, up 5.1% q-o-q in CC terms beating our estimates of $342 million. EBIT margins were flat q-o-q at 14% slightly beating our estimates of 13.9%. The company’s total TCVs stood at $529 million, up14% q-o-q/10%y-o-y.

We interacted with the management of Persistent Systems Limited (Persistent) to understand the business strategy and growth prospects of the company. The company is aspiring to achieve the USD2 billion revenue milestone, aided by its diversified product engineering and IT service offering.

PSYS is targeting a revenue of USD2b by FY27, and the management is optimistic about achieving this target despite a challenging business environment. The company is implementing strict cost management strategies and has visible margin levers such as SG&A, offshoring and pyramid.

We recommend a BUY rating on the stock.

Persistent Systems Ltd (PSL) reported $328 million in revenues, up 5.6% q-o-q in constant currency (CC) terms, beating our estimates of $326 million.

Cost take-out projects and vendor consolidation to be the prime growth driver for PSYS in FY25

Recommendation: Given the company's strong growth potential backed by robust deal wins and superior execution capabilities, we recommend a BUY rating on the stock

Persistent reported revenue of $310.9 million, up 3.4% q-o-q in constant currency (CC) terms, in line with our estimate of $311.2 million, led by growth in Healthcare and BFSI.

Persistent reported mixed performance in Q4 — revenue grew 3.4% QoQ CC, in
line with our estimate, while margin of 14.5% (flat QoQ) missed it. Revenue
growth still lopsided with HLS contributing ~94% of incremental revenue
sequentially.

Recommendation: Given the company's strong growth potential backed by robust deal wins and superior execution capabilities, we recommend a BUY rating on the stock