1. At a Glance
Persistent Systems just delivered Q1 FY26 results that screamed “premium billing.” Revenues jumped 18.8% YoY to $389.7M (₹3,334 Cr), while PAT soared 38.7% to ₹425 Cr. With ROCE of 30% and an OPM holding steady at 18%, this isn’t your average IT uncle’s stock. But is it worth the 57x P/E madness?
2. Introduction with Hook
If Infosys and TCS are the respected old professors of IT, Persistent is that nerdy student who went to hackathons and is now running a unicorn. It’s the startup that never stopped compounding. It blends product engineering with AI, cloud, and every other boardroom buzzword — and somehow makes money too.
- Stock up 71% in 5 years (CAGR)
- Profit growth? A juicy 33% CAGR over 5 years
Persistent doesn’t code. It compounds.
3. Business Model (WTF Do They Even Do?)
Let’s break this down like you explain crypto to your dad:
- Digital Engineering = making other people’s software sexy and scalable
- Cloud Modernization = teaching old IT systems how to live on AWS
- CX Transformation = turning boring customer journeys into dopamine hits
- AI + Data = because throwing “AI” in a pitch deck boosts valuation by ₹500 Cr
- Intelligent Automation = robots doing your job, but prettier
Basically, they’re not just an IT company. They’re a PowerPoint presentation that actually delivers.
4. Financials Overview
| FY (₹ Cr) | FY23 | FY24 | FY25 | TTM |
|---|---|---|---|---|
| Revenue | 8,351 | 9,822 | 11,939 | 12,535 |
| EBITDA | 1,519 | 1,676 | 2,058 | 2,215 |
| Net Profit | 921 | 1,093 | 1,400 | 1,519 |
| OPM % | 18% | 17% | 17% | 18% |
Commentary:
Margins are sticking like chewing gum in summer. Growth is hotter than the AC bills in an AWS data center.
5. Valuation
- P/E: 57.7x (premium enough to be a Bangalore coworking space)
- CMP/BV: 13.7x (book value? Cute.)
- Market Cap: ₹87,665 Cr
Fair Value Range: ₹4,500 – ₹5,200
Beyond ₹6,000? You’re paying for hope, hype, and hallucinated headcount expansion.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 Results:
- Revenue ₹3,334 Cr
- PAT ₹425 Cr (up 38.7%)
- EPS ₹27.17
- Declared ₹15 dividend because why not
- Management Shuffle:
- Chief People Officer out, Rajiv Naithani in. HR 2.0 begins.
- ESOP Allotment:
- 13.5 lakh shares. Loyalty + dilution = startup traditions continue.
7. Balance Sheet
| Metric | FY25 (₹ Cr) |
|---|---|
| Equity Capital | 78 |
| Reserves | 6,241 |
| Borrowings | 311 |
| Fixed Assets | 2,541 |
| Investments | 980 |
| Total Assets | 8,722 |
- Debt: laughable
- Reserves: richer than most seed-stage VCs
- Total Assets: climbing like GPT adoption charts
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY23 | ₹956 Cr | -₹383 Cr | -₹404 Cr | ₹169 Cr |
| FY24 | ₹1,302 Cr | -₹525 Cr | -₹582 Cr | ₹196 Cr |
| FY25 | ₹1,157 Cr | -₹517 Cr | -₹628 Cr | ₹12 Cr |
- Free cash flow still free — but that dividend and ESOP combo? Not so cashlight anymore.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 24% |
| ROCE | 30% |
| OPM | 18% |
| D/E | 0.05 |
| P/E | 57.7x |
Translation: Financially fitter than your gym buddy on protein powder and no carbs.
10. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| FY23 | 8,351 | 1,519 | 921 |
| FY24 | 9,822 | 1,676 | 1,093 |
| FY25 | 11,939 | 2,058 | 1,400 |
YoY revenue CAGR: 27%
YoY PAT CAGR: 33%
In short: Still eating Zomato’s delivery budgets for breakfast.
11. Peer Comparison
| Company | Rev (Cr) | PAT (Cr) | P/E | ROE (%) |
|---|---|---|---|---|
| TCS | 2,56,148 | 49,273 | 23.3 | 52.4 |
| Infosys | 1,65,954 | 27,266 | 24.0 | 28.8 |
| HCL Tech | 1,19,347 | 16,976 | 24.4 | 25.2 |
| LTIMindtree | 38,706 | 4,719 | 33.3 | 21.5 |
| Persistent | 12,535 | 1,519 | 57.7 | 24.1 |
Persistent is the overachiever asking for double marks in viva — performing great but priced like it invented SaaS.
12. Miscellaneous – Shareholding, Promoters
| Holder | Jun 2025 |
|---|---|
| Promoters | 30.56% |
| FIIs | 24.19% |
| DIIs | 27.77% |
| Public | 16.88% |
- Promoter stake inching down, FIIs parking cash like it’s fintech season
- Public holding: Retail bros are cooling off
13. EduInvesting Verdict™
Persistent is the poster child for profitable growth in India’s mid-cap IT universe. Q1 FY26 results are a masterclass in scaling — but valuations have entered nosebleed territory. Love the company. The stock? Only if you like your coffee black and your P/E ratios bloated.
A reliable performer — but maybe not your entry point if you just sold your smallcap dreams to chase quality. Worth a spot in your watchlist gym bag.
Metadata
Written by EduInvesting Team | July 23, 2025
Tags: Persistent Systems Ltd, IT Services, Earnings, EduInvesting Premium
