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Informist, Tuesday, Jan. 20, 2026

--Persistent Systems: On track to clock $2 bln revenue FY27-end, $5 bln FY31 

--CONTEXT: Persistent Systems mgmt comments in post-earnings analyst concall 

--Persistent Systems: Wage hikes had 180 bps impact on margin in Q3 

--Persistent Systems:Deal ramp-ups helped with 150 bps increase in Q3 margin 

--Persistent Systems: Saw demand environment improving in last 3-4 months 

By Shakshi Jain and Narayana Krishna

MUMBAI – Technology services company Persistent Systems Ltd. is on track to achieve its annual revenue goal of $2 billion by the end of 2026-27 (Apr-Mar) and for laying the foundation for its long-term aspiration of $5 billion by FY31, the company management said at a post-earnings conference call with investors and analysts Tuesday.

"This year's Huddle brought together about 650 senior global leaders across sales, delivery, and enabling functions... Over the course of this intensive off-site, we not only charted our priorities and focus areas for FY27, but also assessed our progress towards our long-term aspirations of reaching $5 billion in annual revenue by FY31, and did intensive training on the AI (artificial intelligence) side for our entire leadership," a top company executive said.

In the past three to four months, the company has observed several discussions tied to application and data modernisation. The company has also seen discussions on transformation programs in the healthcare and life sciences domain, the management said. In the hi-tech sector, the company saw AI adoption in product development. 

In the December quarter, the company recorded a 180 basis-point impact on its margin due to the salary increments rolled out during the quarter, the management said. Meanwhile, a favourable fluctuation in currency resulted in a 30 bps support and lower subcontractor costs helped with a 20 bps improvement in margin for the quarter. "Our commercials with the customers are also evolving to include a combination of people and tool-driven pricing models. A couple of engagements of this nature, which we signed in the last quarter and which are now scaling up, have contributed to an improvement in margin by 150 basis points," the management said.

Overall, the company's earnings before interest and tax margin in the December quarter contracted 190 basis points sequentially to 14.4%. However, excluding the one-time impact from the labour codes, the company's EBIT margin for the December quarter expanded 40 bps to 16.7%, the management said. 

For the three months ended Dec. 31, Persistent Systems reported a consolidated net profit of INR 4.39 billion on a revenue of INR 37.78 billion. The company's bottom line was dragged down by a one-time cost of INR 890.25 million arising from accounting changes induced by the new labour codes.

The new labour codes mandate that basic pay must account for at least 50% of an employee's total cost to the company. As a result, payouts tied to statutory contributions such as gratuity and leave-related benefits have increased for companies.

On Tuesday, the company's shares ended 1.5% lower at INR 6,342.50 on the National Stock Exchange. Persistent Systems announced its December quarter earnings after market hours. End

US$1 = INR 90.97

Edited by Saji George Titus

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