Persistent Systems Ltd. share price target

Persistent Systems Limited delivered robust growth in H1FY25, with quarterly revenue growing by over 5% in constant currency terms. The company, which has delivered 24% revenue CAGR, with significant relative sector outperformance over the last four years, continues to outpace both Tier 1 and Tier 2 companies and remains well positioned to deliver industry-leading growth in FY25. While its key North Americas market is seeing strong growth momentum, the company aims to expand its market share in Europe, potentially through acquisitions to gain access to new customers

Persistent Systems (PSYS) reported a strong quarter on all fronts – 1) revenue; 2) deal TCV; and 3) margins.The company can address a key investor concern of its ability to improve margins in FY26 given one-off gains in FY25.

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

Met revenue estimate. But a beat on EBIT margin. Strong 1H and ACV should mean high teen revenue growth with flat EBIT margin vs FY24

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.