The revenue performance (+4.5% QoQ) was tad below the brokerage's estimates (+5.2% QoQ CC), while margins were fairly in line. The momentum within Hi-Tech and BFSI accelerated in Q4, while Healthcare growth decelerated further. Healthcare growth is expected to deteriorate even further due to Medicaid funding cut and large deals assuming support phase in FY26.
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PL Capital Report
Persistent Systems Ltd.'s unique value proposition and its strong play around regulated verticals are keeping it more resilient in this adverse environment. Additionally, the investments around hiring senior leadership team within key verticals have been instrumental in fueling client mining/hunting activities and closing large strategic deals.
We estimate USD revenues/earnings CAGR of 17%/24% over FY25-FY27E. The stock is currently trading at 38x FY27E, we are assigning P/E of 43x to FY27E with a target price of Rs 5,910 (earlier Rs 5,920).
As the stock has witnessed sharp correction in recent times; we upgrade our rating to “Buy” from earlier “Accumulate” while largely maintaining our target price.
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