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Informist, Tuesday, Apr. 21, 2026

By Arya S. Biju

MUMBAI – Broad-based growth across verticals and the absence of one-time costs related to the implementation of new labour codes helped mid-cap information technology major Persistent Systems Ltd. report largely in-line earnings for the March quarter. Sequentially, the company's consolidated net profit for the quarter jumped over 20% due to a low base in the trailing quarter which included a one-time impact of INR 890.25 million arising from accounting changes for the new labour codes. Adjusted for this, the company's bottom line for the reporting quarter rose just 0.2%, the slowest growth in at least over 11 years. 

The technology services company reported a consolidated net profit of INR 5.29 billion for the March quarter, slightly higher than the adjusted net profit of INR 5.28 billion reported in the previous quarter. The net profit was largely in line with the INR 5.31 billion estimated by the Street. On a year-on-year basis, the metric jumped around 34%, higher than the near 18% on-year rise it saw in the trailing quarter but lower than the 45% and nearly 39% rise it reported in the first two quarters of 2025-26 (Apr-Mar). 

The company's consolidated revenue for the quarter rose over 7% sequentially and 25% on year to INR 40.56 billion, slightly better than the INR 40.02 billion estimated by the Street. This marked the twenty-eighth consecutive quarter of sequential growth and the twenty-seventh straight quarter of on-year growth in the company's top line.

In dollar terms, the company reported a revenue of $436 million, up over 3% on quarter and more than 16% higher on year. Analysts had estimated the company to report a revenue of $436.94 million for the March quarter. In constant currency terms, the company's revenue for the March quarter grew 3.4% on a sequential basis, lower than the 4.1% sequential growth it reported in the trailing quarter and 4.5% sequential growth in the corresponding quarter a year ago. Analysts had estimated the company to report a 3.0-4.3% sequential rise in its revenue in constant currency terms for the quarter. 

Revenue from the company's largest segment, software, hi-tech and emerging industries grew over 6% sequentially to INR 15.93 billion in the reporting quarter. Revenue from the segment contributed over 39% of the company's total sales during the quarter. In dollar terms, sales from segment grew over 11% on year to $170.8 million. 

Revenue from the company's banking, financial services and insurance vertical, which accounted for more 34% of the company's total sales, rose around 6% sequentially to INR 13.96 billion. In dollar terms, revenue from the segment jumped over 24% on year to $150.4 million. Meanwhile, revenue from the healthcare and life sciences segment jumped 11% on quarter to INR 10.66 billion. In dollar terms, revenue from the healthcare and life sciences segment was $114.8 million, up 14% on year.

"Q4 FY26 marked our 24th sequential quarter of growth (in consolidated net profit on a year-on-year basis), reflecting the consistency of our execution and alignment to client demand in a market being shaped by AI (artificial intelligence)," said Sandeep Kalra, chief executive officer and executive director of the company, in a post-earnings presentation. "As AI adoption accelerates, our AI-first strategy is strengthening our operating model and improving the quality and scale of delivery across the business." 

The company's total expenditure for the March quarter rose around 8% sequentially to INR 34.15 billion, a tad above the over 7% sequential rise in its net sales. The rise in the company's total expenses was largely on the back of a near 5% sequential jump in its employee benefit expenses to INR 21.37 billion. The cost related to employee benefits accounted for around 63% of the total expenditure in the reporting quarter.

The company's subcontracting costs for the quarter grew 11% sequentially to INR 6.22 billion while other expenses jumped over 19% to INR 5.30 billion. Its depreciation and amortisation expenses for the quarter rose around 8% on a quarter-on-quarter basis to INR 1.09 billion. Tax expenses for the quarter also jumped over 15% on year to INR 1.45 billion.  

The company's earnings before interest and tax for the reporting quarter grew over 21% sequentially to INR 6.59 billion. Meanwhile, its EBIT margin for the quarter improved by 190 basis points to 16.3% from 14.4% in the previous quarter. However, if one were to exclude the impact of the new labour code implementation cost from the previous quarter figure, the EBIT margin for the March quarter would have declined by 40 bps on a sequential basis. 

Persistent Systems' order booking in total contract value was $600.8 million in the March quarter, lower than the $674.5 million in total contract value recorded in the trailing quarter. This is above the $500 million-mark, a trend seen in the preceding six quarters. The company reported an annual contract value of $445.1 million for the reporting quarter, also lower than the $501.9 million reported in the proceeding quarter. 

The company's large client count, with an engagement size of more than $5 million, improved to 62 from 61 in the previous quarter and 55 in the corresponding quarter a year ago. Its total employee headcount was 27,502 as of Mar. 31, compared with 26,711 at the end of Dec. 31. Its employee utilisation rate declined to 88% in the reporting quarter from 88.4% in the previous quarter. The company also saw a decline in its trailing twelve-month employee attrition rate to 13.0% from 13.5% in the previous quarter. 

For the financial year ended Mar. 31, the company's consolidated net profit grew over 33% on year to INR 18.65 billion. This was, however, lower than the INR 19.05 billion estimated by the Street. The company's consolidated revenue from operations for the full year grew 23.5% to INR 147.48 billion, beating analysts' estimate of INR 146.96 billion.  

Along with its March quarter earnings, the company declared a final dividend of INR 18 per share for 2025–26 (Apr-Mar). Ahead of the earnings announcement, shares of Persistent Systems closed at INR 5,329.90 Tuesday, up marginally from the previous close.  End

US$1 = INR 93.50

Edited by Akul Nishant Akhoury

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