Buy Persistent Systems; target of Rs 6200: Sharekhan

Sharekhan's research report on Persistent Systems

Company reported $345.5 million in revenues, up 5.1% q-o-q in CC terms beating our estimates of $342 million. EBIT margins were flat q-o-q at 14% slightly beating our estimates of 13.9%. The company’s total TCVs stood at $529 million, up14% q-o-q/10%y-o-y. Persistent reiterated its aspiration to achieve $ 2 billion revenue target by FY27. Management would endeavour to maintain utilisation at 83-85%.

Outlook

We maintain Buy on the stock with unchanged PT of Rs 6,200 (valuing at 50x Sep-26E EPS). At the CMP, the stock trades at 57.4/45/37.5x its FY25/26/27E EPS.