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Informist, Wednesday, Jul. 23, 2025

By Arya S. Biju

MUMBAI – Mid-cap information technology company Persistent Systems expects the banking, financial services and insurance vertical to lead its growth in 2025-26 (Apr-Mar), followed by its software, hi-tech and emerging industries vertical, the company's management said in a post-earnings call with analysts Wednesday. Further, the company said that it remains committed to its revenue target of $2 billion by FY27, though there is "no hurry to reach there."

"So if you look at where we are today, to get to $2 billion by FY27... we need a compounded annual growth rate in the range of 19-20%", the company's management said, adding that it would consider acquisitions to achieve its revenue target if it gets scalable acquisitions in geographies like Europe. However, the company said it is in no hurry to reach its revenue target and prefers to deliver profitable revenue growth and not achieve revenue growth at any cost.  

Further, the company said it is on track to improve its earnings before interest and tax margin by 200-300 basis points by FY27. During the June quarter, the company reported an EBIT margin of 15.5%, down 10 bps on quarter and up 150 bps on year. The company's margin was impacted by the absence of an earn-out reversal in the quarter, which resulted in a margin headwind of 60 bps and unfavourable currency movement which impacted the margin by 40 bps, the management said. Lower cost related to employee stock ownership plan supported the company's margin by around 230 bps. The company's EBIT for the quarter grew 2.5% on quarter to INR 5.18 billion despite unfavourable currency movement, the company said. 

During the latest quarter, the company witnessed delay in ramp-ups in the healthcare and life sciences segment. Revenue from this quarter rose 12% on year but fell sequentially. "This decline was majorly on account of revenue impact due to the planned transition from onsite to offshore in some of the larger customers," the management said. 

The company postponed its wage hike by a quarter, in view of an uncertain business scenario. The company does expect this decision to postpone the wage hike will not impact its employee attrition rate. Going forward, it does not expect the attrition rate to grow much higher. Its trailing 12-month attrition for the June quarter was 13.9%, up 1 percentage point from 12.9% in the previous quarter and 2 percentage points from 11.9% a year ago. The company said its current attrition rate was within the acceptable range. 

The technology services company announced its June quarter results after market hours. The company reported a consolidated net profit of INR 4.25 billion for the latest quarter on revenues of INR 33.34 billion. Its shares closed nearly 2% lower at INR 5,605.50 Wednesday on the National Stock Exchange.  End

Edited by Deepshikha Bhardwaj

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