Buy Persistent Systems; target of Rs 6430: HDFC Securities

HDFC Securities is bullish on Persistent Systems has recommended buy rating on the stock with a target price of Rs 6430 in its research report dated July 21, 2023.

Broker Research

July 22, 2023 / 18:23 IST

Buy

26 Aug, 2025 12:21

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HDFC Securities' research report on Persistent Systems

Persistent Systems (PSYS) posted in-line revenue performance, supported by strong growth across T1 and T50 (66% of revenue). PSYS is expected to continue its outperformance and key markers of client mining remained steady with (1) T50 posting an impressive 5.7% QoQ growth (ex T1 also growth was 4.5% QoQ), (2) an increase in USD 5mn+ client cohort from 34 in last quarter to 38 in Q1. While deal TCV declined sequentially on the base of record quarters, it was impacted by the spillover of some deals into Q2; multiple marquee wins marked the quarter including deals with the largest hyperscaler, healthcare client deal and ODC setup for Software/Hi-tech client. The company has doubled its revenue in the last three years and is well positioned to double revenue over the next four years, with earnings expected to accelerate even faster (23% EPS CAGR over FY23-26E) as the margin expands.

Outlook

We maintain BUY on Persistent Systems (PSYS) as our top pick in mid-tier IT and our TP is INR 6,430, valuing PSYS at 32x Jun-25E.

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