US Tariffs Uncertainty Should Settle Down In Next Three Quarters: Persistent Systems CEO

Persistent Systems expects a recovery in demand for the IT companies in the US market in the coming quarters of the current fiscal. The uncertainties triggered by the tariffs imposed by US President Donald Trump are expected to be resolved over the next three quarters, according to the company's CEO Sandeep Kalra.

“In the next two to three quarters, we believe that the macro should settle down. Also, given the fact that next year, late next year, there are US elections. All this has to settle down well for the incumbent government to do the right things. So, all of this should bode well for the demand environment,” he told NDTV Profit. 

He was referring to the US midterm elections in November 2026. 

“It is the biggest market for everyone in the world. Europe, because of these tariff discussions, etc., obviously, they have their own takes on this and they will also start investing,” he added.

In dollar terms, Persistent Systems reported $389.7 million in revenue in Q1FY26, reflecting a 3.9% quarter-on-quarter and 18.8% year-on-year growth.

“In constant currency terms, this translates into 3.3% quarter on quarter. This is the 21st sequential quarter of growth. So it's been built up over several quarters. Now coming to the margin part of it, EBIT came in at 15.5%. This is 150 basis points improvement year-on-year,” he said.

The company also reported a total contract value (TCV) of $520 million for the first quarter of FY26, with new bookings contributing $337 million and an annual contract value (ACV) of $385 million.

The Banking, Financial Services and Insurance (BFSI) vertical emerged as a standout performer. Kalra noted that Europe, though a smaller contributor at 8.5-9% of revenues, grew at an impressive 37.5% year-on-year, albeit on a smaller base. The company's revenue contribution from the domestic market stood at 18.3%, while the same for the rest of the world remained marginal.

“The banking and financial services growth that we saw was predominantly in North America.”

The healthcare segment experienced a 2% decline for the quarter. The CEO attributed this to specific headwinds in the US market, including significant funding cuts to university research and pressures on Medicare and Medicaid reimbursements.

“The federal spending in terms of departments related to health services in the US is slowing down or is being cut. That also has an impact on the entire value chain,” he added.

However, he was quick to reassure that the dip was temporary, following six quarters of "absolutely brilliant" growth. He affirmed that the vertical is expected to return to a growth trajectory soon.

Shares of Persistent Systems closed 7.68% lower at Rs 5,175 apiece on the NSE, while the benchmark Nifty50 ended at 25,062.1, down 0.63%.