Target Price: ₹6,050
Current Market Price (CMP): ₹5,722.75
Persistent Systems has demonstrated a strong performance with a compound annual growth rate (CAGR) of 28 percent over the past four years, surpassing many industry peers even prior to the rise of artificial intelligence (AI). The company strategically concentrates on its top 100 clients, which contribute over 82 percent of its revenue. Persistent aims to significantly enhance its market presence in AI, leveraging its AI-powered digital engineering platform SASVA.
In the second quarter of FY26, the firm secured notable victories against Tier-1 competitors, including a substantial consolidation deal in the financial services sector, showcasing its strategic capabilities. Furthermore, Persistent Systems intends to implement contractual provisions to facilitate price increases for experienced resources, thereby promoting consistent margin growth.
The company is projected to maintain sustainable growth across various regions, supported by a clearer demand outlook in critical sectors, a robust pipeline, and strong conversions to Total Contract Value (TCV) and revenue. Margins are anticipated to increase gradually to 16.4 percent by FY27E; however, this expansion may face limitations from macroeconomic challenges, ongoing pricing pressures, and the normalization of utilization rates, which currently stand at 88.2 percent.
Given this analysis, revenue, earnings before interest and taxes (EBIT), and profit after tax (PAT) are expected to grow at CAGRs of 18.2 percent, 24.2 percent, and 23.9 percent, respectively, from FY25 to FY28E. The company continues to maintain an “Add” rating with a target price of ₹6,050.
Published on October 15, 2025
