Persistent Systems rallied more than 12% to hit a fresh 52-week high of Rs 5,798.70 after it reported its Q2 FY25 results.
The company reported a jump of 23.2% on year in net profit standing at Rs 325 crore in Q2 FY25, compared to Rs 236.26 crore posted in the second quarter of the previous financial year.
The company’s revenue from operations came in at Rs 2,897.15 crore in the reporting quarter of the current fiscal year. It was up 20.1% on year, compared with Rs 2,411.67 crore reported in Q2 FY24. The rise in the company’s numbers can be attributed to its focus on advancing AI-led platform services strategy.
Elara Securities on Persistent Systems
The company continues to impress with strong broad-based growth. “We expect a strong growth momentum to continue, barring quarterly fluctuations. We build in 17.6% and 18.4% USD and INR revenue growth in FY24-27E, taking the total revenue to USD 1.9bn in FY27E (against a guidance of USD 2bn). We believe that rationalization of costs with strong revenue growth may help operating leverage. We build in 25% EBIT CAGR over the same period, factoring in 17% EBIT margin in FY27E,” said the brokerage firm Elara Securities in a research note. The brokerage house has given an “Accumulate” rating with a target price of Rs 5,880. However, the brokerage looks lower-than-expected revenue growth and margin expansion not panning out as per expectations as the key risks for the stock.
Persistent Systems Vs Nifty 50
The stock of Persistent Systems has risen a bit more than 3% in the last five trading sessions. It has given a return of almost 8% in the last one month. Persistent Systems has risen 63% in the last six months. It raised investors’ wealth by 57% from year to date and almost 100% in the last one year.
To compare, the benchmark index Nifty 50 has fallen 1.5% in the last five days and 5.25% in the past one month. However, the index delivered almost a 10% return in the last six months and 13% from year to date. The index has given a return of 27.5 % in the last one year.
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