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Informist, Thursday, Apr. 24, 2025

By Anand JC

NEW DELHI – Persistent Systems Ltd. expects the banking, financial services and insurance vertical to lead the company's growth in the coming years, followed by technology and healthcare verticals, its executives told analysts during a post-earnings conference call on Thursday.

Shares of the company reacted positively to its March quarter earnings, as they traded 2.9% higher at INR 5,313 on the National Stock Exchange, while the frontline Nifty 50 index was down 0.3% at 24,250.2. Persistent Systems disclosed its March quarter earnings before markets opened on Thursday, reporting a consolidated net profit of INR 3.96 billion on revenue of INR 32.42 billion.

The healthcare and life sciences vertical contributed 27.3% to Persistent Systems' overall revenue in 2024-25 (Apr-Mar), up from 21% in FY24. The company's management acknowledged that some of its customers in this segment have been impacted by cutting down on costs by the US government through the United States Agency For International Development and the Elon Musk-led Department of Government Efficiency. 

Any individual who was conducting research in the healthcare ecosystem and was funded by the government saw the funding vanish overnight, the company said. This funding was used to buy software, equipment, and services for clinical trials. A cut in funding is exerting stress on the system, according to the company. "I am pretty sure that in a big picture (scenario), this is going to emanate newer opportunities for us to help our customers optimise their costs. We are bullish on the healthcare sector," Persistent Systems said.

The company currently earns over 80% of its revenues from the US, where clients have turned cautious of late due to increasing uncertainty. While customers have become more fearful in the last six weeks, Persistent Systems has not seen any project cancellations. Responding to queries about clients potentially cutting back their spending, the company said it was not dependent on discretionary spending, as evidenced by its performance in the last few cycles.

Its operating margin for the quarter improved to 15.6% owing to favourable currency movement, improved utilisation, and reduction in sales and administration costs, the company said. In the March quarter, the company saw a foreign exchange loss of INR 154.3 million compared to a gain of INR 144.7 million in the December quarter.

Persistent Systems has set a target of $2 billion annual revenue by FY27 and $5 billion revenue by FY31. In FY25, its revenue increased 19% year-on-year to $1.4 billion. To scale up its revenues, the company plans to enter micro-verticals within the existing verticals it is present in. The company plans to enter newer verticals through acquisitions as a dominant force, rather than opting for the organic route.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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