ICICI Direct's research report on Persistent Systems
Persistent System reported a healthy set of Q4FY21 numbers. Dollar revenues increased 4.6% QoQ to US$152.8 million, mainly led by 8.6% QoQ increase in services revenues (85% of revenues) partially offset by 13.8% QoQ decline in IP led revenues (due to seasonality). In terms of verticals, growth was led by financial services (up 6.7% QoQ) and lifescience & healthcare (up 5.7% QoQ). In terms of geography, growth was led by Americas (up 2.1% QoQ) and Europe (up 18.8% QoQ). The EBIT margin expanded 50 bps QoQ to 13.2% due to lower amortisation charges. The company has recommended a dividend of Rs 6 per share.
Outlook
We maintain BUY on the company with a revised target price of Rs 2,385 (25x PE on FY23E EPS) (earlier TP Rs 1850).
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