Persistent Systems witnessed significant gains last session, with its share price rising over 12% to reach a new 52-week peak. This rally followed the release of strong results for the second quarter of the current fiscal year.
Revenues for Q2 FY25 came in 20.1% higher at Rs. 2,897 crore, outpacing estimates. Net profit jumped 23.2% to Rs. 325 crore, aided by continued focus on the company’s AI-driven digital platform services strategy.
Broking firm Elara Securities was impressed with Persistent’s broad-based growth across sectors. They expect the momentum to sustain, forecasting USD revenue growth of 17-18% through FY27. Operating leverage from costs rationalization and scaling up is likely to boost profitability further.
The brokerage maintains an ‘Accumulate’ rating on Persistent stock with a target of Rs. 5,880. Key risks could be lower-than-expected growth or margin expansion not materializing as projected.
In recent periods, Persistent shares have strongly outperformed the broader markets. The counter has surged over 60% in the last six months alone. Returns of 57% year-to-date and nearly 100% in one year highlight investors’ appreciation.
By comparison, the Nifty 50 has declined in the short-term but is still up around 10-27.5% over the medium and long-term. For analysts following this sector, Persistent remains well-positioned to keep delivering shareholder value on the back of its focus on digital transformation solutions.
