Neutral on Persistent System; target Rs 680:Arihant Capital

Arihant Capital's report on Persistent SystemRevenues grew by 8.5% QoQ and 16.9% YoY:Rupee revenues growth was 8.5% QoQ to Rs 543 cr and 16.9 Revenue was USD 82.96 mn with growth of 8.7% YoY and 1.8% QoQ. M about 72.2 % business was driven from infrastructure and financial services business. Revenue for the top 10 clients’s decreased which is a bit concern. IP revenue contribution came down 16.2% from 19.6% YoY, while number of IP employees stood at 3,021 from 2,496 in Q2 FY16 as against Q2 FY15.Valuation:We have valued stock at P/E(x) of 17x to its FY17E earnings and have arrived at fair value of Rs 680 per share. At CMP Rs 664 stock trades at 16.4 earnings. We have ‘NEUTRAL’ rating on the stock, says Motilal Oswal research report.For all recommendations, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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