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Dolat Capital Report
Persistent Systems Ltd. shares are likely to be in focus after Dolat Capital maintained a ‘Sell' rating on the stock, citing premium valuations, near-term earnings pressure, and execution risks linked to its acquisition of Nagarro.
The brokerage has set a target price of Rs 4,720, implying limited downside from current levels, while valuing the stock at 30x FY28E EPS.
Large acquisition at a premium
Persistent recently announced its largest-ever acquisition, agreeing to purchase Germany-based Nagarro SE at an enterprise value of about €1.27 billion (₹137 billion).
The deal involves a cash offer of €81 per share, representing a steep 140% premium to the last closing price and ~94% premium to the three-month volume-weighted average price (VWAP).
Dolat Capital noted that while the acquisition strengthens Persistent's positioning as a global digital engineering and AI-led services player, the premium pricing raises concerns around value creation.
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