The IT stock has been one of the top proponents of the recent stock market rally with many stocks in the space delivering multibagger returns in 2021. One such stock is Persistent Systems which has gained 207% in one year and has gained 140% this year (Year-Year). to this day) alone. NS multibagger stock IT shares of brokerage firm Emkay may see further upside.
“Persistent Systems (PSYS) has seen a 5.6% CQGR in services revenue since Q1FY20 despite the Covid-19 disruptions. This indicates healthy demand and early results of leadership growth, restructured sales promotion structure and strong execution for the company’s offerings, the brokerage said in a report on Monday.
Among its coverage companies, Emkay is expected to lead the pack consistently in terms of organic revenue growth. A strong earnings trajectory and healthy cash generation should help it sustain the high valuation, with the brokerage retaining a buy rating on the stock with a target price of Rs. ₹3,700 per share.
PSYS is broadly witnessing healthy demand and is expected to remain strong over the next 3-5 years. It is confident of maintaining the momentum of revenue growth due to broad-based demand, strong deal intakes, healthy deal pipeline and new logo additions, the note said.
PSYS continues to focus on mining its strategic clients by cross-selling and upselling. “It has been successful in increasing its USD1-5mn and USD5mn+ customers from 61 and 11 customers to 76 and 21 respectively at the end of FY 2020. The company plans to add capabilities across service lines (cloud, data and security). & A.), Vertical (BFSI and Healthcare) and Geography (Europe),” said Emkay.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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