ICICI Securities research report on Persistent Systems
Persistent Systems (Persistent) reported largely in line Q1FY24 revenue growth of 3% QoQ USD (17.1% YoY USD) and 2.9% QoQ CC driven by strong growth in BFSI (+6.2% QoQ USD) and hi-tech (+3.2% QoQ USD), partially offset by a decline of 2.7% in healthcare. There was a miss on EBIT margin that came in at 14.9%, -50bps QoQ (ISEC: 16%, cons: 15.4%). During the quarter, there were headwinds from H1B visa costs (+40bps), work from office related costs (+20bps) and higher D&A charges (+10bps). Deal wins were muted with TCV at USD 380.3mn, -3% YoY, -10% QoQ and ACV at USD 271.9mn, 3% YoY and -12% QoQ due to spill over of deal closures from Q1 to Q2FY24. Management expects softness in next 1-2 quarters with growth at 2-4% QoQ (vs 3-5% QoQ earlier) if macros remain weak in the near term.
Outlook
We reiterate our BUY rating on PSYS with a revised 12-month target price of INR 5,776, implying 21% potential upside.
For all recommendations report, click here
Disclaimer: 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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
