By Vineet Kumar 
Buy Persistent Systems: Target Price ₹7,280 – Sharekhan
Sharekhan has issued a BUY recommendation on Persistent Systems with a target price of ₹7,280, according to their research report dated December 12, 2024. This bullish outlook stems from Persistent’s consistent outperformance in the IT services sector, backed by robust order inflows and a strong growth trajectory.
Key Highlights from the Research Report:
1. Industry-Leading Growth:
Persistent Systems continues to outpace its peers and is well-positioned to deliver industry-leading growth in FY25, thanks to its strong presence across key markets and verticals.
2. Robust Deal Wins:
In Q2FY25, while most IT services companies, including Tier-1 players, faced year-over-year moderation in deal wins, Persistent stood out with its highest-ever deal win total contract value (TCV).
3. Margin Expansion Plans:
The company expects margin improvements in the coming quarters, driven by:
Structural cost optimizations
Operational efficiencies
Reduced spending on SG&A initiatives
Persistent has reiterated its commitment to achieving a 200-300 basis point margin improvement by FY27.
4. Valuation Metrics:
Sharekhan values the stock at 56x Dec26E EPS, maintaining its optimism about Persistent’s growth potential. Currently, the stock trades at 71.6x, 56.1x, and 46.7x its FY25, FY26, and FY27 estimated earnings per share (EPS), respectively.
Persistent’s strong fundamentals and aggressive growth strategy make it a standout performer in the IT services space. Sharekhan’s recommendation reflects its confidence in the company’s ability to maintain its upward momentum.
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