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Informist, Tuesday, Feb. 18, 2025

By Alina Geogy

MUMBAI – The positive view of foreign broking firm JP Morgan on shares of Persistent Systems led traders to place bullish bets on its derivatives segment Tuesday. JP Morgan maintained its 'outperform' rating on the stock and said the technology services company is the fastest-growing player under its coverage, media reports said.

The brokerage expects the earnings of Persistent Systems to rise at a compounded annual growth rate of 29% over the next two years till the end of the financial year 2026-27 (Apr-Mar), according to a CNBC TV18 report. JP Morgan believes the company's management is navigating the tough macroeconomic environment well, as per the report.

JP Morgan has a target price of INR 7,200 for the stock, implying an upside of 24% from Tuesday's close. The 13% fall in the stock price in the last three weeks is a good opportunity to buy a high quality growth stock, the firm said, suggesting a 'buying the dip' approach. Shares of Persistent Systems have fallen 4% so far this month and 3% in 30 days. However, the stock is up 19% in 180 days and nearly 31% in 52 weeks.

Buying momentum after the positive brokerage commentary helped shares of Persistent Systems snap a six-day losing streak and rise as much as 5.1% to an intraday high of INR 5,814 before closing at INR 5,797.25, up 4.8%. The stock's trade volume Tuesday rose to an over-three-week high of 836,676 shares on the National Stock Exchange. In comparision, only 331,116 shares of the company had changed hands on the NSE Monday. The stock emerged as the best performer among Nifty IT constituents Tuesday.

Traders either added long positions or covered their short positions on the call options of Persistent Systems, indicating a bullish approach. The maximium change in open interest on the call side was at the INR 6,400 and INR 6,700 strike prices, which are 10-16% higher than Tuesday's closing price. On the other hand, the maximium change in open interest on the put side was on the INR 5,700 and INR 5,600 contracts, which are 1-4% lower than the closing price.

Meanwhile, investor sentiment in the overall domestic market remained dented amid concerns of reciprocal tariffs on India by the US, continued outflows by foreign institutional investors, and worries over the recent slowdown in corporate earnings. Nearly 73% of all NSE-traded stocks ended lower Tuesday, while the benchmark Nifty 50 index closed at 22945.30 points, down 14.20 points or 0.1%. Traders net added short positions to the February futures contract of the Nifty 50, with open interest rising 0.6% to 17.29 million.

--Nifty 50 Feb closed at 22948.10, down 78.30 points; 2.80-point premium to spot index
--Nifty 50 Mar closed at 23085.00, down 77.05 points; 139.70-point premium to spot index
--Nifty 50 Apr closed at 23235.00, down 69.45 points; 289.70-point premium to spot index

ABB India, HDFC Bank, Reliance Industries, ICICI Bank, Bharti Airtel, Hindustan Aeronautics, Kotak Mahindra Bank, Bajaj Finance, Infosys, State Bank of India, Tata Motors, Mahindra & Mahindra, and Bharat Electronics were the most actively traded underlying stocks Tuesday.  End

Edited by Rajeev Pai

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