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Anand Rathi has buy call on Persistent Systems with a target price of Rs 4980. The current market price of Persistent Systems is Rs 4365. Time period given by analyst is one year when Persistent Systems Ltd. price can reach defined target.
Persistent Systems Ltd., incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 33312.13 Crore) operating in IT Software sector.
Persistent Systems Ltd. key Products/Revenue Segments include Software Services and Software Licence for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 1679.93 Crore, up 10.35 % from last quarter Total Income of Rs 1522.38 Crore and up 45.65 % from last year same quarter Total Income of Rs 1153.39 Crore. Company reported net profit after tax of Rs 200.99 Crore in latest quarter.
Investment Rationale
PSYS continues to deliver industry-leading growth (9% q/q org. in Services, surprising positively. It integrated Data Glove for a month (Media Agility to be integrated from Q1) and had some IP revenue re-classified as services. In margins, it benefited from better realisations and onsite utilisation, leading to a flattish gross margin. SG&A leverage was offset by higher D&A, leading to a 14% EBIT margin, flattish q/q. Ahead, the brokerage expects 14%-14.5% margins, despite higher amortisation, on expecting EBITDA margin expansion. It raises PAT estimates 9-15%, taking the target up to Rs4980, 34x FY24. It upgrades to a Buy recommendation.
Promoter/FII Holdings
Promoters held 31.26 per cent stake in the company as of 31-Mar-2022, while FIIs owned 20.03 per cent, DIIs 26.75 per cent.
Persistent Systems Ltd., incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 33312.13 Crore) operating in IT Software sector.
Persistent Systems Ltd. key Products/Revenue Segments include Software Services and Software Licence for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 1679.93 Crore, up 10.35 % from last quarter Total Income of Rs 1522.38 Crore and up 45.65 % from last year same quarter Total Income of Rs 1153.39 Crore. Company reported net profit after tax of Rs 200.99 Crore in latest quarter.
Investment Rationale
PSYS continues to deliver industry-leading growth (9% q/q org. in Services, surprising positively. It integrated Data Glove for a month (Media Agility to be integrated from Q1) and had some IP revenue re-classified as services. In margins, it benefited from better realisations and onsite utilisation, leading to a flattish gross margin. SG&A leverage was offset by higher D&A, leading to a 14% EBIT margin, flattish q/q. Ahead, the brokerage expects 14%-14.5% margins, despite higher amortisation, on expecting EBITDA margin expansion. It raises PAT estimates 9-15%, taking the target up to Rs4980, 34x FY24. It upgrades to a Buy recommendation.
Promoter/FII Holdings
Promoters held 31.26 per cent stake in the company as of 31-Mar-2022, while FIIs owned 20.03 per cent, DIIs 26.75 per cent.
(Disclaimer: Recommendations given in this section or any reports attached herein are authored by an external party. Views expressed are that of the respective authors/entities. These do not represent the views of Economic Times (ET). ET does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same. Please consult your financial adviser and seek independent advice.
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