Sharekhan's research repor on Persistent Systems
Q2 numbers beat estimates on all fronts; deal signings remained strong for all verticals; we believe appointment of Mr. Sandeep Kalra as CEO is a positive given his proven track record. Management remains optimistic that Alliance business would return to growth trajectory on the back of cross-selling opportunities; targets annual revenue of over $1 billion over next 4 years. Cash & cash equivalents account for 19% of its current market-cap; expect USD revenue/earnings to clock a CAGR of 13%/20% over FY2021-FY23E, led by strong deal wins, cross-selling opportunities & margin expansion.
Outlook
We retain our Buy rating on Persistent Systems Limited (PSL) with a revised PT of Rs. 1,450, as we expect strong earnings growth over FY2021-23E.
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