ICICI Direct recommended hold rating on Persistent Systems with a target price of Rs 575 in its research report dated July 29, 2019.
ICICI Direct's research report on Persistent Systems
Persistent reported another muted quarter both on revenue and margin front. US$ revenues grew 1.1% QoQ to $119.6 million (below our 2.3% QoQ growth estimate) with softness in IP led business for a fourth consecutive quarter. Further, digital also reported a decline of 5.9% sequentially. Adjusted EBITDA margins dragged 180 bps to 15.6% (from adjusted margins of 17.4% in Q4FY19) mainly due to muted performance in high margin IP led business.
Hence, we maintain our HOLD stance with a revised target price of Rs 575/share (12x FY21E EPS).
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