Persistent Systems: Experts give industry & stock outlook

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS Persistent Systems IPO oversubscribed 42 times Confident of holding 23-24% margins: Persistent Systems

Q: Let me approach this from the theme of the Forrester argument of dispersed R&D, there are not so many investors who have taken investments in product companies. Persistent seems to be some kind of a contract worker which applies products to India companies, do you think that there will be a lot of investor interest in companies like Persistent?

Apte: I think that is already happening. Let me say that when I look at this vendors landscape, I won't compare MindTree with a Persistent. From software product development focus outsourced product development services company segment, Persistent is a first company to go public. The peers are really Symphony, Ness Software earlier Aztech, which is a part of MindTree now, but that's the only piece of it. In those companies there are already investments by venture capitalist even Persistent has two venture capitalists into it. Symphony has venture capitalists or private equity company. So every company in this space in the last two-three year has seen inflow of private equity or venture capitalist money coming in. Besides there are midsize or smaller companies not 100 million range like Persistent, but smaller firms also has seen money coming in. Six months back I conducted a workshop in Santa Clara for venture capitalists and private equity companies to understand globalisation of R&D and there was a huge interest. So you will see substantial influx of funds coming into companies such as Persistent who are focusing on R&D services, but also possibly product companies because this space overall is growing.