Reduce Persistent Systems; target of Rs 5000: Emkay Global Financial

Emkay Global Financial recommended reduce rating on Persistent Systems with a target price of Rs 5000 in its research report dated April 25, 2025.

Broker Research

April 25, 2025 / 20:19 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on Persistent Systems

PSYS reported a robust operating performance in Q4. Revenue growth of 4.5% QoQ CC was in-line, while EBITM of 15.6% was ahead of our estimate. Growth was predominantly led by BFSI and Hi-Tech while HLS stood flat. Deal-win TCV moderated sequentially to USD517.5mn (book-to-bill: ~1.4x), largely due to the usual seasonality. The management remains confident about growth momentum over the medium term, but macro uncertainty may weigh on the near-term growth trajectory as there is increased caution among clients due to elevated macro and geopolitical uncertainty. The mgmt reaffirmed its aspiration of revenue run-rate of USD2bn by FY27-end and of USD5bn by FY31-end. It targets expanding EBITM by ~100bps in FY26. While uncertainty has increased and the environment is fluid, the mgmt stays focused on execution and building a higher deal pipeline for tackling the tough demand environment.

Outlook

We up FY26- 27E EPS by ~1-3%, factoring in the Q4 performance and lower ETR. Given the rich valuations, we retain REDUCE and TP of Rs5,000 at 36x Mar-27E earnings.

For all recommendations report, click here