Persistent Systems Q4 Review - Inline Revenue Aided By Healthcare, Lifescience Vertical: HDFC Securities

HDFC Securities Institutional Equities

Persistent Systems Ltd. ticked the box on growth and deal wins, while margins for the quarter faltered due to deal-specific dynamics. We expect Persistent Systems’ growth leadership to hold, supported by its pedigree in software product engineering, market-share gains from larger peers, and strong deal velocity – any recovery in discretionary is an upside risk to growth based on service portfolio and vertical mix.

The margin improvement track for the company will continue—despite the Q4 miss on margin, the medium-term outlook on margin stays. While Persistent Systems’ valuation multiples have rerated over the past few years and return potential is likely to be a function of superior earnings growth, the correction presents an opportunity—buy the dip.

Maintain Buy on Persistent Systems with a target price of Rs 4,110, based on 35 times FY26E, supported by 25% earnings per share compound annual growth rate over FY24-26E.

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