Persistent Systems had a strong Q3 with sequential organic growth of 6.7%. According to brokerage house Anand Rathi, EBITDA margins were flat and the Data Glove acquisition should be favorable for the company at this stage. multibagger stock Has given a return of over 122% in a year, while it is down by around 18% in 2022 (Year-to-date or YTD) so far.
“FCF turned bad in FY12, and is likely to improve further, but only gradually, looking at payments. We take the rating on hold on strong price performance,” the note said. The brokerage’s target price is 4,640 each on the Persistent Systems shares.
“Continues to deliver strong growth, driven by volumes as onsite billing rates have been a bit softer (more work was delivered than on the coast and in Europe). The company now adds the data glove that it provides to the Microsoft ecosystem (enterprise). applications, not Microsoft).”
The deal size is currently small but in the sweet spot of the persistent. The company expects the addition of Salesforce and IBM to meaningfully scale up this technology exercise.
Persistent Systems delivered earnings before interest and tax (EBIT) margins of 14% in Q3FY22 and 9MFY22. With the DataGlove acquisition, it expects margins to face a 75 bps headwind initially, although there is no dilution at the EBITDA level. With a gradual recovery, brokerage house Anand Rathi expects FY13 margins to be 14% as operating leverage comes into play.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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