Buy Persistent Systems; target of Rs 6200: Sharekhan

Sharekhan's research report on Persistent Systems

The company is aspiring to achieve $USD2 billion revenue milestone, aided by its diversified product engineering and IT service offerings, focus on large deal bookings, and broad-based growth across its verticals. Management has reiterated its commitment of 200-300 bps EBIT margin improvement, aided by cost-optimisation programs, reduction in SG&A, rationalisation of ESOP cost, and higher utilisation. Management is looking at tuck-in acquisitions to improve capabilities in cyber security.

Outlook

We maintain BUY with revised PT of Rs. 6,200 (valued at 50x Sept26E EPS). At CMP, the stock trades at 59.5/46.3/38.4x its FY25/26/27E EPS.

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