Buy Persistent Systems: target of Rs 5550: Sharekhan

Sharekhan's research report on Persistent Systems

Persistent Systems beat estimates; Q4 witnessed strong deal TCVs, robust net headcount additions, and strong client mining; ACV remained strong at $943.1 million in FY2022. Revenue growth would be supported by broad-based demand, robust deal intake, client mining, and incremental revenue from acquisitions. PSL is well positioned to once again deliver market-leading growth in FY2023. Management remains confident of delivering sustainable margin in FY2023 on strong revenue growth, flattening pyramid, and gradual increase in realisation.

Outlook

We retain Buy with a PT of Rs. 5,550, given strong revenue growth potential, robust ACV, and building growth avenues via tuck-in acquisitions.

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