Persistent Systems’ stock witnessed a 12 per cent surge on Thursday following strong Q3 results, eliciting a mix of reactions from various brokerages.
The stock closed at a high of ₹6,286.15 on the BSE, up by 10.57 per cent, and reached ₹6,270 on the NSE, closing 10.33 per cent higher. The company’s market cap stood at ₹97,717.95 crore.
For the quarter ending December 2024, Persistent Systems reported a consolidated net profit of ₹372.99 crore, marking a 30 per cent increase from the previous year’s ₹286.13 crore. Revenue from operations also saw a significant 23 per cent growth from ₹2498.2 crore to ₹3062.3 crore.
Additionally, the company announced an interim dividend of ₹20 per share for the fiscal year 2024-25.
Buy Recommendations:
JM Financial expressed confidence in Persistent Systems, noting that the company’s Q3 performance met expectations. The brokerage highlighted improved order backlog, firm margins, and the company’s generative AI strategy. They valued the stock at 55x and maintained a buy rating with an increased target price of ₹7,630.
Motilal Oswal sees a 34 per cent upside potential due to the company’s superior earnings growth trajectory and reiterated a buy rating with a revised target price of ₹7,600.
Nuvama Institutional Equities maintained a buy call with a target price of ₹7,000, citing the company’s strong growth and recovery in core margins in the quarter. The brokerage commended the management’s diversification into new verticals and expansion plans.
Hold or Sell?
PL Capital retained a hold call with a reduced target price of ₹5,970, acknowledging Persistent Systems’ resilience in regulated verticals and strategic investments in senior leadership. They noted that while the company is performing well, the current valuation appears expensive.
Emkay Global upgraded the stock from sell to reduce with a target price of ₹5,300, awaiting a better entry price. Nomura remained neutral at a target price of ₹6,200, while HSBC maintained a hold call at ₹5,650, emphasizing the positive surprise of Persistent Systems’ accelerating non-healthcare verticals.
Citi and Kotak Institutional Equities maintained sell calls with a target price of ₹5,000.
Persistent Systems and Coforge closed as top gainers in the Nifty IT index, which rose by 1.79 per cent to 43,351.75.
