Persistent Systems Q3 Results: Profit Surges 8.7% In Seasonally Weak Quarter

Persistent Systems Ltd. has grown its top and bottom lines in a seasonally weak quarter for India's $250 billion IT services industry and delivered on profitability as well.

Revenue of the Pune-based IT services firm rose 3.58% over the previous three months to Rs 2,498.21 crore in the quarter ended Dec. 31, according to an exchange filing Saturday. That compares with the Rs 2,488.62-crore consensus estimate of analysts tracked by Bloomberg.

Persistent Systems Q3 Results: Key Highlights (Consolidated, QoQ)

• Revenue up 3.58% at Rs 2,498.21 crore. (Bloomberg estimate: Rs 2,488.62 crore)

• EBIT up 9.77% at Rs 363.10 crore. (Bloomberg estimate: Rs 353.60 crore)

• EBIT margin up 82 bps at 14.53%. (Bloomberg estimate: 14.21%)

• Net profit up 8.68% at Rs 286.13 crore. (Bloomberg estimate: Rs 280.33 crore)

One basis point is one-hundredth of a percentage point.

In dollar terms, revenue increased 3% sequentially to $300.55 million—a milestone for the company. The total contract value—or value of deal wins, new and renewed—scaled the $500-million mark for the first time to come in at 521.4 million.

“We are proud to announce the 15th sequential quarter of growth and a significant milestone of our first-ever quarter of $300 million-plus revenue and $500 million-plus in TCV bookings,” Sandeep Kalra, chief executive officer at Persistent Systems, said in a statement. “We are thankful for the ongoing trust and support of our valued clients and partners, which has led to our sustained growth.”

For shareholders, Persistent Systems has announced an interim dividend of Rs 32 per share. The board of the company has also recommended to the shareholders a resolution to split the face value of shares from Rs 10 per share to Rs 5 per share.

Separately, the company has announced two key appointments: Dhanashree Bhat as chief operating officer and Barath Narayanan as the global head of the company's financial services practice.

What stood out in Persistent Systems' earnings statement was the fact that the firm added to its headcount during the quarter, at a time when its larger, top-tier peers reported declines. Headcount at the Pune-based IT services firm increased by 494 to 23,336 employees in the three months through Dec. 31 at a trailing twelve-month attrition rate of 11.9%. The utilisation levels also improved to 81.5% from 80.6% a quarter ago.

On Saturday, Persistent Systems' shares rose 0.91% to Rs 7,933.20 apiece on the BSE even as the benchmark Sensex ended the day 0.36% lower at 71,423.65 points. The quarterly results were declared after market hours.