Persistent Systems Ltd. share price target

Revenue: Persistent Systems Q1FY26 revenue came in at INR 33,336 Mn, up 21.8% YoY (+2.8% QoQ), in-line with our estimates, primarily driven by robust performance in the BFSI segment, with incremental contributions from Software, Hi-Tech, and Emerging Markets verticals, partially offset by softness in healthcare and Life Sciences.

The revenue performance (+3.3% QoQ) was tad below our estimates (+3.5% QoQ CC), margins at 15.5% were also slightly below our estimates of 15.7%. The momentum within BFSI and Hi-Tech continued, while Healthcare growth decelerated further and reported a decline of 1.9%. The delayed ramp up and right-shifting of resources have led to the decline in Healthcare vertical. The...

We resume our coverage with a BUY rating on the stock.

Revenue stood at $389.7 million, up 3.3% q-o-q in CC terms, missing our 4% estimate. EBIT margins declined ~10 bps q-o-q to 15.5%, missing our estimate of 15.9%.

Persistent Systems (PSYS) reported 1QFY26 revenue of USD390m (vs. est. USD392m), up 3.9% QoQ in USD terms and 3.3% in CC (est. +4.0%). EBIT margin stood at 15.5% (est. 15.8%).

We interacted with management of Persistent Systems to understand the company’s business strategy and growth prospects.

Delivers industry leading growth in FY25 and in 4QFY25 and maintains its aspiration of US$2bn revenue by FY27 (20% CAGR)

PSYS reported a robust operating performance in Q4. Revenue growth of 4.5% QoQ CC was in-line, while EBITM of 15.6% was ahead of our estimate. Growth was predominantly led by BFSI and Hi-Tech while HLS stood flat.

The revenue performance (+4.5% QoQ) was tad below our estimates (+5.2% QoQ CC), while margins were fairly in line. The momentum within Hi-Tech and BFSI accelerated in Q4, while Healthcare growth decelerated further. Healthcare growth is expected to deteriorate even further due to Medicaid funding cut and large deals assuming support phase in FY26. The management indicated that the recent rejig has elevated caution on decision making among few Healthcare clients. However, the outlook on Hi-Tech and BFSI remains...

Revenue stood at $375.2 million, up 4.5% q-o-q in constant currency (CC), beating our estimates of 4% q-o-q growth in CC terms. Revenue in rupee terms stood at Rs. 3,242 crore, up 5.9% q-o-q/25.2 % y-o-y. EBIT margin improved ~70 bps q-o-q to 15.6% % but missed our estimate of 15.9%.

Persistent Systems (PSYS) reported a 4QFY25 revenue of USD375m, up 4.2% QoQ in USD terms (est. +3.8%) and 4.5% in CC (est. +4.0%). EBIT margin stood at 15.6% (est. 14.8%).

3QFY25 revenue/EBIT margin beat our sub-consensus estimate. It did not say discretionary demand has turned around but said it will deliver

Q3FY25 operating performance was a tad better than our estimate. Revenue growth of 4.6% QoQ CC was in-line, while EBITM of 14.9% was slightly ahead of our estimate. Unlike in previous few quarters, growth was broad-based across verticals/geographies

Persistent Systems (PSYS) reported 3QFY25 revenue of USD360.2m, up 4.3% QoQ in USD terms (est. 3.9%) and 4.6% in CC. EBIT margin stood at 14.9% (est. 14.4%).

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

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 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.

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