Q3 Results impact: Persistent Systems shares fall 4% despite Q3 net profit rise, SRF tumbles 5% to nine-month low

Q3 Results impact: Persistent Systems shares fall 4% despite Q3 net profit rise, SRF tumbles 5% to nine-month low

• Persistent Systems shares drop 4% post Q3 results; net profit up 18% YoY, down 7% QoQ
• SRF shares dropped 5% to a nine-month low; Q3 net profit rose 60% YoY
• Brokerages raise target prices for Persistent Systems, remain optimistic despite concerns.

Did our AI summary help?

The shares of Persistent Systems dropped more than 4 percent to a near six-week low on January 21 after the company released its results for the October-December quarter of the financial year 2026. Some brokerages remained optimistic and increased their target prices for the stock, while some cited valuation concerns.

SRF shares meanwhile tumbled more than 5 percent to trade at a nine-month low of Rs 2,730.10 apiece. Both these companies had released their results in the post-market hours of January 20.

Persistent Systems Q3 Results:

Persistent Systems reported a consolidated net profit of Rs 439.45 crore for Q3 FY26. This marks an 18 percent year-on-year (YoY) increase from the Rs 372.99 crore net profit reported in Q3 FY25, but 7 percent quarter-on-quarter (QoQ) decline from Rs 471.47 crore reported in Q2 FY26.

The net profit reported in the third quarter of the ongoing financial year 2026 however includes 1.8 percent one-time impact due to the new labour codes.

The firm’s revenue from operations rose 23 percent YoY to Rs 3,778.2 crore during the quarter under review. “We are also applying Agentic AI within our own operations, as a ‘customer zero’ to improve productivity and speed adoption at scale, an approach further validated by our recognition as a Microsoft Frontier Firm. As we move ahead, our priority remains sustaining growth through consistent execution as demand continues to shift toward larger, more complex engagements,” said Persistent’s CEO Sandeep Kalra.

Along with the Q3 results, Persistent Systems announced an interim dividend of Rs 22 per share for the financial year 2026. The record date to determine the eligibility of the shareholders set to receive the payment has been set at January 27.

JM Financial on Persistent Systems:

JM Financial maintained its ‘Buy’ rating on the stock, and increased its target price to Rs 7,600 per share. This implies an upside potential of nearly 20 percent from the stock’s previous closing price.

The domestic brokerage said that the firm reported yet another strong quarter in Q3, with revenue meeting elevated expectations. It added that margins beat expectations materially. “PSYS continues to have a competitive edge and is benefitting from AI-led modernization, adoption and data readiness led demand. Its head start with platforms/tools such as SASVA and iAURA, alongside internal AI-led productivity efforts allows it to present a compelling value proposition on cost and speed of delivery to clients, driving deal momentum in our view,” JM Financial said.

Choice Institutional Equities on Persistent Systems:

Choice Institutional Equities increased its target price for the stock to Rs 7,000 per share, while maintaining its ‘Add’ rating. This implies an upside potential of more than 10 percent from the stock’s previous closing price.

“Despite ongoing macro uncertainty, the company has sustained consistent execution, led by its strengthening product engineering capabilities…enhancing its competitive positioning in enterprise AI,” it said.

HSBC on Persistent Systems:

HSBC held a ‘Hold’ call for the stock with a target price of Rs 6,560 per share, which implies an upside potential of more than 3 percent from the stock’s previous closing price.

The international brokerage reported strong growth in Q3 with further improvement in profitability, the firm said. However, it noted that the market expectations seem to be fully priced in the valuation.

Nomura on Persistent Systems:

Nomura held a ‘Neutral’ call for the stock, with a target price of Rs 6,100 per share. The international brokerage said that the IT company’s growth was in-line with estimates, and margin beat expectations in Q3 FY26.

SRF Q3 Results:

SRF reported a consolidated net profit of Rs 432.66 crore for Q3 FY26, marking a 60 percent YoY rise from Rs 271.08 crore reported in Q3 FY25.

The firm’s revenue from operations meanwhile gained 6 percent YoY to Rs 3,712.53 crore, missing estimates.

Brokerage UBS says SRF's medium‑term growth looks constrained due to elevated refrigerant prices, continued Chinese pricing pressure, ongoing weakness in agri‑chem, and management abandoning its 20 percent specialty‑chem growth target.

Follow all LIVE updates from the stock markets here.