1. Opening Hook
Persistent just delivered another “strong quarter” — which in IT parlance usually means nothing broke badly.
But this time, something actually did move: margins slipped, AI bragging went up, and labour laws gate-crashed the P&L.
While peers are still explaining why demand visibility is “mixed,” Persistent quietly clocked its 23rd consecutive quarter of growth. No drama. No apology tour. Just execution… plus a ₹22 dividend cherry on top.
That said, EBIT margins took a hit — not because clients vanished, but because India remembered employees need gratuity. Awkward.
Stick around. The AI monetisation story gets interesting later, and the margin math is sneakier than it looks.
2. At a Glance
- Revenue $422.5 mn (+17.3% YoY) – Growth stayed boringly consistent. Markets hate surprises, this one behaved.
- QoQ growth 4.0% (CC +4.1%) – No currency gymnastics needed.
- EBIT margin 14.4% – Labour laws walked in uninvited, ate 230 bps.
- PAT margin 11.6% – Profits dipped QoQ, but YoY still nodded politely.
- TCV $674.5 mn – Deal machine humming, not screaming.
- Dividend ₹22/share – Management signalling confidence, not desperation.
3. Management’s Key Commentary
“We delivered 23rd sequential quarter of revenue growth.”
(Translation: This isn’t a one-off, please stop asking if growth is over. 😏)
“New Labour Codes impacted
EBIT margin by ~2.3%.”
(Translation: Government policy > AI productivity, at least this quarter.)
“Ex-labour code, EBIT margin would’ve been 16.7%.”
(Translation: Trust us, fundamentals are fine.)
“AI-led engagements contributed 150 bps margin improvement.”
(Translation: Tools are finally paying rent. 😎)
“Top 10 customers grew 28.3% YoY.”
(Translation: Big clients still like us — and are spending more.)
“We are on track for $2 bn by FY27 and $5 bn by FY31.”
(Translation: Long runway, no U-turns planned. 🚀)
4. Numbers Decoded
| Metric | Q3 FY26 | Decoded Take |
|---|---|---|
| Revenue | $422.5 mn | Clean growth, no accounting acrobatics |
| QoQ Growth | 4.0% | Healthy for a mid-cap IT player |
| EBIT Margin | 14.4% | Hit by labour code, not demand |
| EBIT (₹) | ₹5,427.5 mn | Absolute profits still growing |
| PAT | ₹4,394.5 mn | YoY +17.8%, QoQ sigh |
| Cash & Investments | ₹29,046 mn | Balance sheet still overfed |
| ROCE | 43.8% | Capital efficiency intact |
One-liner: Margins slipped for structural reasons, not operational weakness.
5. Analyst Questions —
