Persistent Systems Q4 Review - Services Momentum Sustain; Alliance Recovery In-Line: Dolat Capital

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Dolat Capital Report

Persistent Systems Ltd. reported stellar Q4 performance, with 4.6% QoQ growth (our estimate 3.1%) led by 8.3% QoQ growth in technology services unit business while alliance business declined 7.3% (lower seasonal decline than usual).

Operating profit margin improved by 50 basis points QoQ to 13.2% (our estimate 12.4%) driven by positive operating leverage and increased off-shoring 300 basis points QoQ.

The company declared a dividend of Rs. 6 per share.

Total contract value stood at $247 million (Q3: $302 million) with new deals at $138 million (Q3: 175 million).

Annual contract value at $200 million indicates revenue coverage of about 1.3 times.

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