In the rapidly evolving technology landscape, investors are constantly seeking robust investment opportunities with promising growth potential. A recent analysis by ICICI Direct has highlighted a compelling investment prospect with extraordinary prospects for the next few years.
The financial research firm has identified a technology stock with significant momentum, projecting a substantial 25% growth potential by 2027. Their comprehensive evaluation points to a strategic positioning that leverages emerging technological trends and innovative platforms.
With a targeted valuation of ₹6,500 and a rating of “Buy”, the stock demonstrates strong fundamentals driven by diversified portfolio strategies and emerging generative AI technologies.
Share Price Movement
The share price of Persistent Systems Limited went up by 0.26 percent to Rs. 5,725.10 per share on Thursday, an increase from its previous close of Rs. 5,710.30 per share. The market capitalisation now stands at approximately Rs. 89,225 crore as of November 21, 2024.
Order Book
The total contract value (TCV) for the quarter reached $529 million, including $389.8 million from new bookings. Of this, the annual contract value (ACV) totaled $348.3 million, with $218.6 million from new bookings.
Q2 Financial Highlights
According to its recent filing, in the quarter ending September 2024, Persistent Systems’s consolidated revenue from operations has increased by 20 percent YOY from Rs. 2,412 crore in Q2 FY24 to Rs. 2,897 crore in Q2 FY25 and increased by 5.8 percent QoQ from Rs. 2,737 crore in Q4 FY24.
The company’s consolidated net profit has increased by 23.5 percent, from Rs. 263 crore in Q2 FY24 to Rs. 325 crore in Q2 FY25. As compared to the last quarter of 2025, the company’s net profit has increased by 6.2 percent QoQ from Rs. 306 crore.
Management Guidance
Persistent Systems is optimistic about sustaining growth despite seasonal challenges like furloughs in the second half. Management anticipates margin expansion through improved utilization, reduced headcount, and cost optimization, offsetting wage hikes and policy-related headwinds. AI-driven platforms and advanced technologies remain central to enhancing services and driving growth.
Also read….
Market Outlook
The current market environment continues to pose challenges, with high inflation, geopolitical tensions, and uncertain macroeconomic conditions. Growth outlook in advanced economies is expected to be feeble, and overall risks to the growth outlook are tilted to the downside. However, the technology industry has seen significant growth during the pandemic, with companies accelerating their digital transformation efforts. Despite the challenges, there are expectations for the tech sector to return to modest growth, as companies leverage digital advancements like Artificial Intelligence (AI) to boost productivity and profitability.
Target Price
ICICI Direct has given a “Buy” rating on the stock, valuing it at a target price of ₹ 6,500, at 46x PE on FY27E EPS. Their rationale is that they expect earnings growth of 25.8% over FY24-27E with a diversified portfolio and increased traction for its GenAI platforms to be a key catalyst for its long-term growth.
Shareholding Pattern
As of the November 2024 shareholding pattern, Persistent Systems Limited is primarily held by the promoters at 30.66 percent, foreign institutional investors hold 23.34 percent, and the public with 16.96 percent.
About Company
Persistent Systems, founded by Anand Deshpande in 1990, is a leading technology services provider headquartered in Pune, India. With approximately 21,950 employees, the company excels in cloud computing, IoT, big data analytics, and software product engineering. It has earned recognition for enabling digital transformation and enterprise modernization for clients worldwide, making it a key player in the global tech landscape.
The company delivers diverse services such as digital strategy, software engineering, intelligent automation, and enterprise IT security. Persistent caters to industries including healthcare, BFSI, and telecommunications. It has expanded its expertise through acquisitions like Infospectrum India, Data Glove, MediaAgility, and Starfish Associates, showcasing its commitment to growth and innovation.
Persistent Systems continues to redefine the technology sector by integrating advanced solutions with client-centric approaches. Its focus on cutting-edge innovations and strategic partnerships solidifies its position as a global leader in digital transformation.
Written By Fazal Ul Vahab C H
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
Start Your Stock Market Journey Today!
Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!
