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Informist, Friday, Jul. 31, 2026

By Arya S. Biju

MUMBAI – Persistent Systems Ltd. is expected to witness a sequential slowdown in both net profit and revenue growth for the June quarter. Strong sales in the healthcare, and banking, financial services, and insurance verticals coupled with execution of deals won in previous quarters are expected to boost the company's top line for the quarter. However, moderate growth in sales from its largest vertical, hi-tech, may slow down the overall top line growth. 

Analysts are largely divided on how the company will fare in terms of margin, with some expecting it to improve sequentially supported by cost optimisation measures and the depreciation of the rupee. Others expect the margin to contract sequentially, led by higher subcontracting costs coupled with continued investments in artificial intelligence, consulting and capability build-out, and marketing.

Persistent System's consolidated net profit for the June quarter is expected to rise nearly 4% on quarter and over 29% on year to INR 5.49 billion, according to the average of estimates from 19 brokerages. This is slower than the over 20% sequential rise and near 34% on-year rise in net profit reported for the trailing quarter. The highest estimate for the company's net profit is INR 5.72 billion from Anand Rathi Share and Stock Brokers Ltd. and the lowest is INR 5.15 billion from Emkay Global Financial Services Ltd. 

The technology services company's consolidated net sales for the reporting quarter is expected to be INR 42.45 billion, up around 5% on quarter, according to the average of 19 estimates. This will mark the slowest sequential growth in the company's top line in four quarters. On year, the top line is seen rising over 27%, the fastest growth in 13 quarters. Estimates for the company's top line range from a low of INR 41.37 billion from Nirmal Bang Equities Pvt. Ltd. to a high of INR 42.80 billion from Bank of America Global Research. 

In constant currency terms, the company's revenue is seen rising 2.8–3.5%, according to estimates from 14 brokerages. In dollar terms, the company's revenue for the quarter is expected to grow 3% on quarter to $449.1 million, according to the estimates. 

Most brokerages expect Persistent Systems to report robust growth in its sales from the banking, financial services, and insurance, and healthcare and life sciences verticals. On the other hand, sales from the company's largest vertical, software, hi-tech and emerging industries, are expected to see only moderate growth, most of them said. "BFSI and Healthcare are expected to remain the key growth drivers, supported by AI-led application modernisation and continued large deal ramp-ups," Motilal Oswal Financial Services Ltd. said. 

Of the 15 brokerages that have given estimates for the company's earnings before interest and tax margin for the reporting quarter, nine expect a sequential improvement and see it at 16.4-16.7%. "EBIT margins are expected to improve by 24 bps QoQ (quarter-on-quarter), supported by higher utilisation, currency tailwinds, and operational efficiencies," Axis Securities Ltd. said. 

Of the remaining six brokerages, one expects the EBIT margin to remain unchanged from a quarter ago at 16.3% while others see the metric falling 10-20 basis points sequentially to 16.1-16.2%. "Margins may decline ~20bp QoQ to ~16.1%, as continued investments in AI platforms, consulting and capability build-out offset operational efficiencies and currency tailwinds," Motilal Oswal said. "Utilization remains healthy and may offer limited incremental margin leverage from current levels," the brokerage added.  

The company's total contract value for the June quarter is expected to be $500 million – $650 million, according to the five estimates. The total contract value for the quarter is expected to stay above the $500-million mark as the company continues to capitalise on strong partnerships and outcome-based engagements, Nirmal Bang said. The company's order booking for the March quarter was $600.8 million in total contract value and $445.1 million in annual contract value. 

Persistent Systems will announce its June quarter earnings on Sunday. Market participants will watch out for the management's commentary on revenue and margin growth outlook for the financial year 2026–27 (Apr-Mar), deal intake and pipeline, and demand trends across verticals. Updates on the discretionary spending outlook, the impact of artificial intelligence and the war on West Asia on business, and on further investments in Al will also be monitored by the Street. 

Management comments on the company's recent acquisition of German digital engineering firm, Nagarro SE, will also be closely watched. Further, updates on the progress in acquisitions critical for its path to reach the $5-billion revenue target by 2031 will also be monitored. 

At 0915 IST Friday, shares of Persistent Systems were at INR 5,319 on the National Stock Exchange, down 3.6% from Thursday. The stock has risen nearly 5% since the March quarter earnings announcement but is down around 22% from its all-time high of INR 6,788.9 hit on Dec. 20, 2024. 

Of the 16 brokerage reports on the company available with Informist, eight have a "buy" or an equivalent recommendation on the stock, six have a "hold" or an equivalent recommendation and two have a "sell" call. The average target price of the "buy" calls is INR 5,766, indicating an over 8% upside from the current market price and that for "hold" calls is INR 5,203, which is over 2% lower than current levels. 

Following are the Apr-Jun earnings estimates for Persistent Systems from 19 brokerages, in descending order of the net profit estimate, in INR billion:

End

US$1 = INR 95.37

Edited by Shubhayan Bhattacharya

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