Buy Persistent Systems; target of Rs 387: Nirmal Bang
Nirmal Bang is bullish on Persistent Systems (PSL) and has recommended buy rating on the stock with a target price of Rs 387 in its October 17, 2011 research report.
October 19, 2011 / 11:08 IST
Nirmal Bang is bullish on Persistent Systems (PSL) and has recommended buy rating on the stock with a target price of Rs 387 in its October 17, 2011 research report.
"Persistent Systems (PSL), revenues in Q2FY12 grew by 6.4% QoQ, and 27.4% YoY at Rs.238.2crores on the back of depreciated rupee. Contribution from life sciences segment grew to 10.6% in Q2FY12 from 9.9% in the previous quarter. EBIDTA margins improved by 130bps qoq to 18.7% on the back of lower operating expenses which were lower by 190bps qoq. Currency impact on the EBIDTA was of 1.9%. Earnings grew by 18% QoQ to Rs.32.4 crore, mainly because of lower taxes due to one-offs and forex gain. IP-led revenues contributed 7.6% to the revenues during the quarter against 6.10%. Management expects good phillip to these revenues in the coming quarters. During the quarter, technical time spent in IP business stood at 5.5% (growth of 80 bps QoQ). During the quarter, small clients saw good gain at 211 clients reflecting overall global mood whereby smaller projects are getting executed faster and larger clients are delaying decisions. Onsite billing rates saw a decline of 2.8% at USD 12665 p/pm whereas offshore rates have remained flat at USD 3771 p/pm. During the quarter, utilization excluding trainees and freshers improved to 73.8%, a growth of 110 bps QoQ. Attrition rate remained under control at 17.7%. Company has mainted earlier guidance of $ 220mn on revenues and preferred not to comment given the unstable world economy.""PSL has grown better than expected during the first half of FY12E. While one off items and forex gain has aided to PSL
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