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Buy Persistent Systems; target of Rs 4980: Anand Rathi

Anand Rathi is bullish on Persistent Systems has recommended buy rating on the stock with a target price of Rs 4980 in its research report dated April 29, 2022.

April 30, 2022 / 11:14 AM IST
 
 
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Anand Rathi's research report on Persistent Systems


PSYS continues to deliver industry-leading growth (9% q/q org. in Services, surprising positively. It integrated Data Glove for a month (MediaAgility to be integrated from Q1) and had some IP revenue re-classified as services. In margins, it benefited from better realisations and onsite utilisation, leading to a flattish gross margin. SG&A leverage was offset by higher D&A, leading to a 14% EBIT margin, flattish q/q. Ahead, we expect 14%-14.5% margins, despite higher amortisation, on expecting EBITDA margin expansion.



Outlook


We raise PAT estimates 9-15%, taking the target up to Rs4980, 34x FY24. We upgrade to a Buy recommendation.

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first published: Apr 30, 2022 11:14 am
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