Persistent Systems Ltd. share price target

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

We recommend a BUY rating on the stock with a near term TP of Rs 7,115, implying an upside of 10% from CMP.

Persistent’s revenue grew 3.2 QoQ CC, 3.1% QoQ USD in-line with our estimate, but above consensus’ estimate of 2.5% QoQ USD. Revenue growth was led by the Healthcare (7% QoQ USD) and Technology verticals (3.8% QoQ USD). BFSI was flat QoQ. EBIT margin came in at 13.7%, down 120bps QoQ.

We assign a 27x P/E multiple to its FY26E earnings of Rs 239.1/share to arrive at a TP of Rs 6,435/share, implying an upside of 10% from the CMP. Hence, we recommend a BUY rating on the stock