Persistent Systems Share Price Sees Best Session In Nine Months On Strong Q2 Earnings

Persistent Systems Ltd.'s share price jumped 10% to hit the upper circuit, clocking the best session in nine months on Tuesday as its profit jumped 23% in the second quarter ended September 2024.

The IT services firm reported a consolidated net profit of Rs 324.9 crore for the July-September quarter, compared with Rs 263.2 crore in the same period last year. Revenue from operations for the quarter was Rs 2,897.1 crore, marking a 20% rise from Rs 2,411.6 crore in the previous year's September quarter.

During the quarter, the company recorded order bookings of $529 million (approximately Rs 4,447 crore) in total contract value. Based in Pune, Persistent Systems has a global workforce of over 23,200 employees, with 19,899 based in India.

"This quarter, we continued to enhance our capabilities and advance our AI-led, platform-driven services strategy," Chief Executive Officer Sandeep Kalra said.

Dolat Capital maintained a ‘sell’ rating with a target price of Rs 4,250. The brokerage believes that the stretched valuations and risk to a significant cut in consensus estimate make the stock expensive.

Persistent Systems share price rose as much as 10% during the day to Rs 5,674 apiece on the NSE to get locked in the upper circuit. This is the best session the stock has seen since Jan. 23, 2024. This compares to a 0.33% advance in the benchmark Nifty 50 as of 10:20 a.m.

It has risen 95% during the last 12 months and has declined by 53% on a year-to-date basis. The total traded volume so far in the day stood at 8.6 times its 30-day average. The relative strength index was at 60.

Seventeen out of the 37 analysts tracking the company have a 'buy' rating on the stock, nine suggest a 'hold' and 11 have a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 4.8%.