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This multibagger stock is up 103% in 6 months. Prabhudas Lilladher sees further upside

Persistent Systems shares have surged 165% this year so far

2 min read . Updated: 28 Oct 2021, 01:44 PM IST Livemint

The multibagger stock has surged around 103% in six months alone, whereas this year, it is up over 165% so far

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For the second quarter ended September, Persistent Systems Strong revenue growth of greater than 9% QoQ for two consecutive quarters, said Prabhudas Lilladher in a note. The multibagger stock has surged around 103% in six months alone, whereas this year, the IT stock is up over 165% (year-to-date) so far.

The brokerage sees further upside on the stock as it has a Buy recommendation with a target price of ₹4,641 apiece. “Strong headcount addition over last 4 quarter led to headcount increase of 47% YoY indicating strong revenue growth momentum." The deal pipeline also remains healthy with participation in even larger deals.

Tech firm Persistent Systems reported a 58.6% rise in consolidated net profit to ₹161.7 crore for the September 2021 quarter. The company had registered a profit of ₹101.9 crore in the year-ago period.

Prabhudas believes that Persistent can deliver strong growth given strong deal TCV of $282.5 million, with 53% net new wins in Q2 and TTM TCV of $1075.8 millionn and also strong headcount addition with total headcount up 47% YoY.

The company's management aspires to reach $1 billion annual revenue run-rate in next 1.5-2 years. The management has also mentioned that they will prioritize investing for growth and will maintain EBITDA margins in the band of 16-17%. They aspire margin expansion of 100 bps over next 2-3 years, the note highlighted.

“We are delighted to share that Persistent ended the quarter on a record high note - once again delivering industry-leading performance, including year-over-year revenue growth of 34 per cent and continued margin improvement," Persistent Systems Chief Executive Officer and Executive Director Sandeep Kalra said.

Persistent Systems provides digital engineering and data and artificial intelligence products to the software, banking, financial services and healthcare sectors.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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