Persistent Systems Q1 Results Review - Continuous Upbeat With Robust Order Book: Nirmal Bang

Nirmal Bang Report

Persistent Systems Ltd. reported a robust Q1 FY25 results, marking the 17th consecutive quarter of sequential growth. USD revenue 328 million, grew by 5.6% QoQ constant currency, in line with average growth of last 17 quarters (~5.8%). This was a solid beat on our estimates of 3%.

It continues to demonstrate its strong pedigree in software engineering, leveraging its expertise to drive innovation and client value. Their investments in AI and automation, as well as the development of the Gen-AI hub, have positioned them favorably in the market. This when read with company's total contract value for the Q1 at $462.8 million, with new bookings of $310.8 million, underpins strong revenue trajectory.

Early green shoots for macro and resuming of demand from BFSI could become positive for Persistent where they are being continuously able to gain market from tier-I’s. We believe with the macro improving and Persistent Systems’ continuous outperformance, they will continue to fall under leader’s quadrant for growth. Hence, we raise our USD revenue growth expectations by 0.9% to 2.5% for FY25-27E.

Persistent Systems continues to deliver significant growth in the Healthcare and Life Sciences (+17% QoQ) and BFSI (+6% QoQ) verticals. Its deep-rooted expertise in software engineering continues to be a cornerstone of its success.

The Healthcare and Life Sciences and BFSI verticals are expected to continue leading the growth, supported by it's ability to win and ramp up significant deals in these segments. The focus on mid-sized deals and expanding relationships with large BFSI clients further enhances the growth prospects.

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