At a Glance
Persistent Systems is the fastest-growing midcap IT firm in India, with a 33% profit CAGR and 73% 5-year stock CAGR. It partners with Salesforce, AWS, and Google Cloud while minting 30%+ ROCE — but trades at a TCS-breaking P/E of nearly 66. Worth it?
1. 🎯 Introduction with Hook
Infosys walks. TCS jogs. Persistent sprints.
In a world where large-cap IT is struggling with attrition, wage costs, and generative AI panic, Persistent has not only survived — it has grown faster than most SaaS unicorns. The catch? You’re paying 66x earnings for a services company. But it’s not “just” services anymore.
2. 🧪 WTF Do They Even Do?
Persistent is NOT your boring IT services vendor:
- 🧠 AI & Data Engineering: Cloud-native, multi-cloud, analytics-driven
- 🔗 Enterprise Modernization: Digital transformation for BFSI, healthcare, tech
- 🤖 Intelligent Automation: Process optimization via ML + bots
- ☁️ Cloud & Platforms: Strong partnerships with AWS, Microsoft Azure, Salesforce
- 🧬 Healthcare & Life Sciences: Deep play in biomedical research + compliance (via Pi-OmniKG)
They’re basically doing what TCS should have done by now — at scale.
3. 💰 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 4,188 | 5,711 | 8,351 | 9,822 | 11,939 |
| Net Profit (₹ Cr) | 451 | 690 | 921 | 1,093 | 1,400 |
| EPS (₹) | 29.5 | 45.2 | 60.2 | 71.0 | 90.5 |
| ROE (%) | 22% | 24% | 24% | 24% | 24% |
| OPM (%) | 16% | 17% | 18% | 17% | 17% |
🚀 5-Year CAGR:
- Revenue: 27%
- Profit: 33%
- EPS: 30%+
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
- P/E: 65.9
- P/B: 14.0
- EV/EBITDA: ~39x
- Dividend Yield: 0.61%
📉 Fair Value Estimate (EduInvesting Math):
Assume FY26 EPS: ₹110
- At 30x = ₹3,300 (Normal IT valuation)
- At 45x = ₹4,950 (High-growth multiple)
- At 55x = ₹6,050 (Bullish on AI)
➡️ FV Range = ₹3,300 – ₹6,050
Current price: ₹5,724. Already close to the upper bound.
5. 🔥 What’s Cooking – News, Triggers, Drama
- 💼 SoHo Dragon Assets Acquired (Feb–Apr 2025): US-based BFSI + data firm
- 🧬 Pi-OmniKG: AI for biomedical knowledge graphs, co-launched with Google Cloud
- 🏆 Google Cloud Partner of the Year 2025
- 🔁 Merger of Capiot Software (integration of middleware tools)
🧠 Edu takeaway: Strategic buyouts + deep product integrations = growth engine fuelled
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| FY25 Snapshot | ₹ Cr |
|---|---|
| Total Assets | 8,722 |
| Net Worth | 6,319 |
| Borrowings | 311 |
| Investments | 980 |
| Fixed Assets | 2,541 |
| Net Debt | Practically zero |
It’s like having your cake (assets) and eating it too (zero debt). That’s Persistent for you.
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | Capex (Est.) | FCF (₹ Cr) |
|---|---|---|---|
| FY23 | 956 | 400–450 | ~500 |
| FY24 | 1,302 | 400–500 | ~800 |
| FY25 | 1,157 | 500+ | ~650 |
Consistent cash, even with acquisitions and product R&D. IT with capex discipline.
8. 📊 Ratios – Sexy or Stressy?
| Ratio | Value | Verdict |
|---|---|---|
| ROCE | 30.4% | 🔥🔥🔥 |
| ROE | 24.1% | Elite Club 💼 |
| OPM | 17% | Slight pressure |
| Cash Cycle | 56 days | Efficient 🚛 |
| Working Cap Days | 50 | Neutral zone |
Only red flag? Margins have plateaued despite topline growth.
9. 📈 P&L Breakdown – Show Me the Money
- Q4FY25 Revenue: ₹3,242 Cr → Up 25% YoY
- PAT: ₹396 Cr → EPS ₹25.6
- OPM: Still at ~18%, stable
- YoY EPS Growth: 27%
Translation: Unlike Wipro and TechM, Persistent didn’t sleep through the GenAI wave.
10. 🧯 Peer Comparison – Who Else in the Game?
| Company | P/E | ROCE (%) | OPM (%) | Sales FY25 (₹ Cr) | PAT FY25 (₹ Cr) |
|---|---|---|---|---|---|
| TCS | 25 | 64.6 | 26.4 | 2,55,000+ | 48,500+ |
| Infosys | 25.6 | 37.5 | 24.1 | 1,62,000+ | 26,500+ |
| LTIMindtree | 34 | 27.6 | 17.1 | 38,000 | 4,600 |
| Persistent | 65.9 | 30.4 | 17.2 | 11,939 | 1,400 |
Persistent punches above its weight — but the valuation is Silicon Valley-style.
11. 🧩 Miscellaneous – Shareholding, Promoters, KMP
- Promoter Holding: 30.66% (steady)
- FII Holding: 24.36% (climbed up)
- DII Holding: 26.85% (very stable)
- Public: ~17%
- KMPs:
- Chairman & MD: Anand Deshpande
- CFO & Director: Appointed April 2025
- Board: Includes tech entrepreneurs and domain specialists
📈 Shareholding is healthy — mutual funds love this stock.
12. 🧑⚖️ EduInvesting Verdict™
Persistent is the poster child of premium IT:
- Zero debt
- Cloud-native partnerships
- AI-led products
- Rapid growth
- And strong earnings momentum
But it trades at 2.6x TCS’s P/E.
🎯 Verdict:
“Persistent is like ChatGPT wearing a Tata Consultancy badge — smart, scalable, but now priced like it’s solving cancer with code. If it executes, the stock’s still not expensive. If it slips, there’s no valuation cushion.”
Fair Value Range = ₹3,300 – ₹6,050 (FY26E EPS ₹110, 30x–55x multiple)
Current Price: ₹5,724
✍️ Written by Prashant | 📅 10 July 2025
Tags: Persistent Systems, IT Midcap, AI Stocks, Google Cloud Partner, SaaS-style IT Stocks, High Growth IT, Digital Transformation, EduInvesting, Capiot Merger, SoHo Acquisition
