Buy Persistent Systems; target of Rs 6450: Motilal Oswal

Motilal Oswal's research report on Persistent Systems

Persistent Systems (PSYS) reported a 4QFY25 revenue of USD375m, up 4.2% QoQ in USD terms (est. +3.8%) and 4.5% in CC (est. +4.0%). EBIT margin stood at 15.6% (est. 14.8%). EBIT grew 10.9% QoQ/34.9% YoY to INR5.0b. Adj. PAT came in at INR3.9b (est. INR3.9b), up 12.2% QoQ/25.5% YoY. For FY25, revenue/EBIT/PAT grew 21.6%/23.8%/22.6% YoY in INR terms.

Outlook

We expect PSYS’s revenue/EBIT/PAT to grow 23.4%/41.3%/9.4% YoY in 1QFY26. TTM TCV was USD517.5m, down 13% QoQ but up 15.6% YoY (1.4x book-to-bill). We value PSYS at 45x FY27E EPS. Reiterate BUY with a TP of INR6,450.