Buy Persistent Systems; target of Rs 4300: Sharekhan

Sharekhan is bullish on Persistent Systems has recommended buy rating on the stock with a target price of Rs 4300 in its research report dated October 20, 2022.

Broker Research

October 25, 2022 / 13:34 IST

Sharekhan's research report on Persistent Systems

Persistent Systems Limited (PSL) reported strong revenue for Q2FY23 led by strong IP led and Services revenues. Revenue in constant currency terms grew 6.6% on q-o-q basis against our estimate of 5.8%, EBIT Margin at 14.6 % for Q2FY23 reported an uptick of 27 bps over Q1FY23 as supply side pressure eased, attrition moderated supported by favourable currency tailwind despite impact of wage hike in July. Despite macro-overhang the management indicated that demand is robust, and it does not see any delay in decision making process on deals. Utilization rates at 79.9% for Q2FY23 improved by 40 bps compared to Q1FY23. Key verticals and geographies have continued to grow in Q2FY23, but some moderation in growth was visible as compared to Q1FY23. The management cited that clarity on impact of furloughs would be known only in mid-November.

Outlook

We retain a Buy on PSL with an unchanged PT of Rs. 4,300, given strong bookings, sustained acceleration in deal TCVs, strong execution capabilities and new growth avenues from recent acquisitions.

For all recommendations report, click here