Anand Rathi has given Buy recommendation for Persistent Systems with a target price of Rs. 4410 in its research report issued on Oct 21, 2022
Anand Rathi’s research report on Persistent Systems
Persistent was resilient in key metrics despite the top client sliding 21% q/q as it reported 5% q/q (organic) company growth. Tail winds came from the IP-led business, which surprised, absorbing almost half of the fall. The EBIT margin rose 27bps q/q, absorbing 230bps of the wage-hike impact and was 72bps higher y/y. TCV touched $368m, up 30% y/y and net new TCV was up 53% y/y; no slow down yet. Management intends to maintain growth; margins would improve as supply challenges seem to be behind.
Outlook
We revise estimates ~10% driven by TCVs and margins. Target increased to Rs.4,410 (23x FY25, earlier Rs.4,290).