Sharekhan has given Buy recommendation for Persistent Systems with a target price of Rs. 3600 in its research report issued on Jul 23, 2021
Sharekhan’s research report on Persistent Systems
Strong beat in revenue growth; Q1FY2022 witnessed higher billing rates, healthy deal TCVs, aggressive employee addition and strong client additions. EBIT margin improved 39 bps q-o-q to 13.5%. PSL is well poised to deliver yet another strong year after industry-leading growth in FY2021. Healthy deal wins, investments in partnerships & increase in pricing to support strong revenue growth. The management expects margin headwinds would be largely absorbed by strong revenue growth, operational efficiencies and better pricing. We expect USD revenue/earnings to post 19%/30% CAGR over FY2021-FY2024E.
We retain Buy on Persistent Systems Limited (PSL) with a revised PT of Rs. 3,600, given strong earnings growth potential, healthy deal wins and M&A activity to enhance capabilities/market penetration.