Earnings Outlook
Hi-tech, BFSI verticals may boost Persistent Systems revenue
This story was originally published at 13:51 IST on 16 April 2026
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By Arya S. Biju
MUMBAI – Execution of the deals won in the previous three quarters and robust sales in its hi-tech and banking, financial services, and insurance verticals are expected to boost Persistent Systems Ltd.'s top line for the March quarter. However, analysts are divided on how the company will fare in terms of margin, with some expecting an improvement on a sequential basis, led by a sharp depreciation of the rupee against the dollar and the absence of one-time costs related to new labour code provisions. Meanwhile, some expect higher investments made by the company and normalisation of software licence sales to hit the margin for the reporting quarter.
The technology services company's consolidated net profit for the March quarter is expected to be INR 5.31 billion, up marginally from the INR 5.28 billion reported in the trailing quarter, according to the average of estimates from 16 brokerages. However, on a year-on-year basis, the company's consolidated net profit for the quarter is seen rising over 34%.
The company's consolidated net sales for the quarter are expected to grow around 6% sequentially and over 23% on year to INR 40.02 billion, according to the average of 16 estimates. This will mark the twenty-eighth consecutive quarter of sequential growth and the twenty-seventh straight quarter of on-year growth in the company's top line.
The lowest estimates for bottom line and top line of INR 4.99 billion and INR 39.04 billion, respectively, are from Dolat Capital Market Pvt. Ltd. On the other hand, the highest estimate of INR 5.96 billion for the company's bottom line is from Anand Rathi Share and Stock Brokers Ltd. and of INR 40.51 billion for its net sales is from Kotak Securities Ltd.
In constant currency terms, Persistent Systems' revenue for the reporting quarter is expected to improve 3.0-4.3% on a sequential basis, estimates from 10 brokerages showed. This is expected to be led by relatively higher growth in the hi-tech and banking, financial services, and insurance segments, according to analysts. During the December quarter, revenue from the software, hi-tech and emerging industries segment contributed around 40% to the company's total sales while the banking, financial services, and insurance segment contributed 35%.
Most brokerages except ICICI Securities Ltd. and Kotak Securities, expect the sales from the company's healthcare and life sciences vertical to remain weak during the March quarter due to budget constraints for its clients. In the trailing quarter, revenue from the vertical contributed over 25% to the total sales of the company.
Analysts' views on the company's margin performance were largely divided. Estimates for the company's earnings before interest and tax margin for the reporting quarter ranged from 16.2% to 17.6% compared to 16.7% reported in the trailing quarter, excluding the impact of new labour code implementation cost. "We expect a slight decline in EBIT margin of 20bps (basis points) QoQ (quarter-on-quarter) to 16.5%, as headwind on margins due to normalisation in license sales (Q3 is seasonally strong for licence business)," ICICI Securities said in a report. In contrast, Anand Rathi expects the company's EBIT margin to improve by 193 basis points on quarter, led by a depreciation of the rupee against the dollar and the absence of one-time costs from new labour code-related provision.
The company's total contract value for the March quarter is expected to remain above the $500 million mark, as in the past six consecutive quarters, as it continues to capitalise on strong partnerships and outcome-based engagements, brokerage Nirmal Bang Equities Pvt. Ltd. said. While the company is expected to report a healthy growth in its total contract value on a year-on-year basis, the growth may slow down on a sequential basis as the December quarter is seasonally strong, led by renewals. In the December quarter, the company had reported a total contract value of $674.5 million and an annual contract value of $501.9 million.
Persistent Systems will announce its results Tuesday. Market participants will watch out for the company's management's commentary on the 2026 technology budget of US-based clients and on any likely impact of the increased geopolitical uncertainties on the overall demand environment. Comments on the potential impact of artificial intelligence-led disruptions to revenue and measures taken to negate this will also be monitored by the Street, according to analysts.
Management commentary on deal wins and deal pipeline, potential capability additions through acquisitions, and updates on any client-specific issues, especially in the healthcare vertical, will be watched for, analysts said. Further, the sales and margin outlook for 2026-27 (Apr-Mar) and beyond, and an update on the long-term margin outlook will also be monitored.
At 1348 IST, shares of the company were trading marginally higher at INR 5,508.20 apiece on the National Stock Exchange. The stock has fallen 12% since the company detailed its December-quarter earnings on Jan. 20 and is more than 19% down from the record high of INR 6,788.90 reached on Dec. 20, 2024.
Of the 15 research reports on the company available with Informist, nine have a 'buy' or equivalent recommendation on the stock with an average target price of INR 7,465, which is 36% higher than the stock's closing price Wednesday. Of the remaining six, four have a 'hold' or equivalent recommendation with an average target price of INR 5,966, around 9% higher than the closing price Wednesday, and two have a 'sell' call on the stock.
Following are the March quarter earnings estimates for Persistent Systems from 16 brokerage firms in descending order of the estimate of net profit in INR billion:
Brokerage | Net Sales | Net Profit | EBITDA | Revenue (mln $) | % EBIT margin |
Anand Rathi Share and Stock Brokers Ltd | 40.14 | 5.96 | 7.91 | 439 | 17.6 |
Nomura Equity Research | 40.24 | 5.55 | -- | 440 | 17.3 |
Equirus Securities Pvt Ltd | 40.50 | 5.45 | 7.89 | 437 | 17.1 |
Indsec Securities and Finance Ltd | 39.60 | 5.30 | -- | 426 | 16.6 |
Prabhudas Lilladher Pvt Ltd | 40.20 | 5.30 | -- | 441.2 | 16.5 |
JM Financial Institutional Securities Pvt Ltd | 40.05 | 5.29 | 7.55 | 438 | -- |
Motilal Oswal Financial Services Ltd | 39.93 | 5.29 | 7.71 | -- | -- |
ICICI Securities Ltd | 40.25 | 5.28 | -- | 436 | 16.5 |
Kotak Securities Ltd | 40.51 | 5.27 | -- | 438 | 16.8 |
Elara Securities (India) Pvt Ltd | 39.79 | 5.26 | -- | 437 | -- |
Centrum Broking Ltd | 39.96 | 5.24 | -- | -- | 16.3 |
Nuvama Wealth Management Ltd | 40.19 | 5.24 | -- | 440 | 16.2 |
Nirmal Bang Equities Pvt Ltd | 39.85 | 5.18 | -- | -- | 16.3 |
Emkay Global Financial Services Ltd | 40.19 | 5.18 | 7.67 | 437 | -- |
HDFC Securities Ltd | 39.94 | 5.18 | -- | 437 | 16.4 |
Dolat Capital Market Pvt Ltd | 39.04 | 4.99 | -- | 434 | 16.4 |
Average | 40.02 | 5.31 | 7.74 | 436.94 | -- |
End
US$1 = INR 93.29
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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