Persistent Systems: Quarterly Result update
01-11-2021

Persistent Systems | Market Cap: Rs. 29,987Cr.

CMP 3924 | PE 40x FY23

Results: Persistent Systems reported 9.9% sequential growth in sales and 12.5% growth in the operating profit in Q2FY22.

Operating margins improved to 13.9% (vs 13.5% in previous quarter).

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Key highlights: 

  • Services and IP revenue grew at 10% and 4.8% respectively over previous quarter. Overall it is industry leading growth.
  • The revenue from of a top customer formed 17% and that from top 10 customers formed 45.4% of overall revenue during the quarter. 
  • Operating profit margins was flat which is quite good despite increase in salaries. Going forward, ESOP will amount to 0.8% of sales affecting operating margins.
  • The company won deals worth Total Contract Value of $282.5 million, impressive 15% higher over previous quarter.
  • Attrition rate increased to 23.6% (vs 17% in previous quarter), a negative.
  • Cash and cash equivalents stood at 1870 Cr i.e. 245/share.

Management Outlook: Persistent expects high growth over next 2-3 years backed by robust deal wins and sales momentum. Medium term growth rate will track deal win growth rate. Margins may improve over next few quarters from traction in IP revenue.

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