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Buy Persistent Systems target of Rs 3954: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Persistent Systems has recommended buy rating on the stock with a target price of Rs 3954 in its research report dated October 01, 2021.

October 01, 2021 / 01:30 PM IST
 
 
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Prabhudas Lilladher's research report on Persistent Systems


Persistent’s acquisition of SCI and its affiliate, Fusion 360, serves as the foundation for scaling up the newly announced Payment Business Unit given – 1) SCI’s deep domain capabilities specializing in Payment solutions and Fusion 360’s expertise in servicing leading Payment platforms including IBM’s Financial Transaction Manager (FTM), 2) SCI provides inroads to 10 (most within top 20) leading banks in North America, 3) presence in Charlotte, North Carolina, one of the largest US banking hubs, 4) opens up cross-selling opportunities and 5) complements Persistent’s work of taking FTM to hybrid cloud for their largest client. Payments has become strategic growth area not only for Banking clients, but payments deliver foundational functionality across all industries, as it accelerates the adoption of digital to improve customer experience.



Outlook


Our EPS estimates increased by 5.9%/4.9% led by increase in revenue estimates by 5.3%5.4% for FY23/24E year. We arrive at DCF based TP of INR 3954 (earlier: 3603). Persistent is currently trading at 36x/34x on FY23/24E earnings of INR 104.5/110.1 with Revenue/EPS CAGR of 20.2%/25.0% over FY21-24E .

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first published: Oct 1, 2021 01:30 pm

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