Persistent Systems Ltd. share price target

We recommend a BUY rating on the stock and assign a 38x P/E multiple to its FY24E earnings of Rs 126.8/share to arrive at a TP of Rs 4,820/share, indicating an upside potential of 18% from CMP.

Q4 revenue growth of 9.1% QoQ USD outperformed estimates led by services business; TCV at US$ 361mn rose 8% QoQ

all companies in NIFTY IT Index, several mid-cap, small cap IT firms and new age internet players. Management commentary across companies indicate that strong demand environment is expected to continue over medium term and revenue growth is no longer contingent on winning large deals. Pricing environment has also improved. Additionally, companies are doing aggressive fresher hiring resulting in pyramid balancing which will provide considerable margin tailwinds in FY23....

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Background: Persistent Systems is one of the leading outsourced product development (OPD) companies in India. Revenue from business offering mix: Services (86.7%) & IP led business (13.3%). The company's business is spread across North America (79.2%), Europe (8.3%), and RoW (12.5%).Company earns revenue from global delivery centers (31.4%), India (55.3%) and IP Led (13.3%). Total active clients stood at 1000+ including services and IP led business. Company's top...

We recommend a BUY rating on the stock and assign a 38x P/E multiple to its FY24E earnings of Rs 126.8/share to arrive at a TP of Rs 4,820/share, indicating an upside potential of 12% from CMP.

Strong revenue growth momentum over past three quarters led to 33% YoY growth in 9MFY22. We believe this momentum can sustain given 1) strong deal TCV of $334.3 mn, +18% QoQ,11% YoY with 47% net new wins and TTM TCV now at $1.108 bn, 2) strong deal ACV of $291.3 mn, +45% QoQ, 14% YoY with 44% net new wins and TTM ACV now at $881.9 mn and TTM book-to-bill ratio of 1.26x, 3) strong headcount addition with total headcount up 37% YoY....

Persistent Systems (PSYS) reported a strong 3QFY22, with revenue growth (USD) of 9.2% QoQ (120bp above our estimates; 6.7% QoQ organic) and 16.8% EBITDA margin (est. 16.1%). It reported a TCV of USD334m (+18% QoQ), with 47% new business TCV. While seasonal strength in IP business aided 3Q growth, the continued good performance of its Services (+5.4% QoQ organic growth) on a base of double-digit sequential growth in last two quarters denotes the momentum in PSYS' client mining. Moreover, PSYS continues to...

Above-expected Q3 with revenue growth of 9.2% QoQ USD led by IP business