Persistent Systems shares have been under pressure recently, with the stock correcting 19% from its recent peak of Rs 6,788. Despite a stellar performance in 2024, when it emerged as the top gainer on the Nifty IT index with a 74% rise, the current dip reflects market caution.
Brokerages have projected robust growth for the December quarter, though sectoral challenges loom. JM Financial expects the company to report a net profit of Rs 354.2 crore for Q3 FY25, a 23.8% increase from Rs 286.1 crore in the year-ago quarter. Revenue is estimated at Rs 3,040.3 crore, a 21.7% rise year-on-year. Dollar revenue is projected at $360 million, reflecting strong growth in constant currency (CC) terms.
Nuvama highlighted Persistent’s continued momentum from deal conversions, forecasting a 3.8% sequential growth in revenue on a constant-currency basis and profit after tax at Rs 350.2 crore. Margins are expected to expand by 50 basis points. Meanwhile, brokerage Motilal Oswal anticipates 4% sequential revenue growth on a constant-currency basis, driven by strength in healthcare verticals.
Persistent Systems’ Q2 FY25 results had set a positive tone, with net profit climbing 23.4% year-on-year to Rs 324.9 crore and dollar revenue rising 18.4% to $345.5 million. The company’s operational resilience was underscored by its stable EBIT margins of 14%.
Analyst sentiment on Persistent Systems remains mixed. According to Tendlyne data, 16 of 33 analysts covering the stock recommend a “buy,” while 12 suggest a “sell,” with a consensus target price of Rs 5,965 per share.Earlier this week, the company reaffirmed its strong financial position by earning an ICRA AA+ (Stable) credit rating. Persistent Systems offers digital engineering, cloud computing, and enterprise IT security solutions across industries, with a strong global footprint spanning key markets such as the US, India, and Japan.Also read | Rs 44,600 crore loss! Zomato shares crash 18% in 3 days. Is the worst behind?
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
