Q4FY21 Company Update - Persistent Systems - ICICI Direct

Persistent System reported a healthy set of Q4FY21 numbers. Dollar revenues increased 4.6% QoQ to US$152.8 million, mainly led by 8.6% QoQ increase in services revenues (85% of revenues) partially offset by 13.8% QoQ decline in IP led revenues (due to seasonality). In terms of verticals, growth was led by financial services (up 6.7% QoQ) and lifescience & healthcare (up 5.7% QoQ). In terms of geography, growth was led by Americas (up 2.1% QoQ) and Europe (up 18.8% QoQ). The EBIT margin expanded 50 bps QoQ to 13.2% due to lower amortisation charges. The company has recommended a dividend of Rs. 6 per share.

Valuation & Outlook

We believe Persistent will be a key beneficiary of secular growth in technology mainly led by its digital prowess and partnership with Red Hat, Salesforce & other hyperscalers. This coupled with increasing large deal size, focus on client mining, new client addition and acceleration in European revenues bode well for long term revenue growth. Hence, we maintain BUY on the company with a revised target price of Rs. 2,385 (25x PE on FY23E EPS) (earlier TP Rs. 1850).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Persistent_CoUpdate_Apr21.pdf

Shares of PERSISTENT SYSTEMS LTD. was last trading in BSE at Rs.2038.55 as compared to the previous close of Rs. 1998.4. The total number of shares traded during the day was 42315 in over 4467 trades.

The stock hit an intraday high of Rs. 2184.6 and intraday low of 2022.6. The net turnover during the day was Rs. 89255591.

Source : Equity Bulls

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