Multibagger IT stock tanks 9% post Q1 earnings, here's why
The IT stock slipped 9.29% to a low of Rs 5084.15 in the current session against the previous close of Rs 5605.35 on BSE.
- Jul 24, 2025,
- Updated Jul 24, 2025 1:48 PM IST
Persistent Systems share price today: Shares of mid-tier IT services company Persistent Systems tanked over 9% today after the firm reported its Q1 earnings. Persistent Systems stock slipped 9.29% to a low of Rs 5084.15 in the current session against the previous close of Rs 5605.35 on BSE. Market cap of the firm fell to Rs 80,094 crore. The stock opened lower at Rs 5,541.50 today.
Choice Equities expects the growth in margins of the IT firm to slow down.
According to Choice Institutional Equities, factors such as pricing, utilization, and SG&A efficiency lead to an outlook of conservative margin expansion to 16.3% by FY27E. The stock took a hit in the morning session today.
Brokerage JM Financial has maintained its buy call on the IT stock. However, it said the firm's 3.3% QoQ growth in constant currency term, came below its estimates of 4%. This could have impacted investor sentiment in today's trade.
However, the growth was still creditable considering the current macro. Sequential growth also belies a still strong YoY growth of 18.8%
The brokerage lowered its price target by 20% to Rs 6720 against the earlier target of Rs 6770.
According to Nuvama Institutional Equities, Persistent Systems is logging industry-leading growth of 18.7 per cent YoY in Q1FY26. Its FY27 revenue target of $2 billion signals a strong CAGR of 19 per cent. All along, its margins and cashflow remain robust, it said.
"The stock is now trading at 40x P/E FY27 – which might appear expensive, but we find it justified given the 24 per cent earnings CAGR anticipated over FY25–27E; retain ‘BUY/SO’," Nuvama said.
MOFSL expects an 18 per cent dollar revenue growth for Persistent Systems, compounded annually over FY25-2. This combined with margin expansion, could lead to a 25 per cent EPS CAGR.
This places the company in a league of its own as a diversified product engineering and IT services player, MOFSL said.
"We largely maintain our estimates for FY26E/FY27E. Owing to its superior earnings growth trajectory, on a PEG basis, we believe the valuation still has room for upside. We value PSYS at 48x FY27E EPS. Reiterate BUY with a target of Rs 6,800," it said.
The multibagger stock has climbed 115% in two years and gained 1,231% in five years. Total 0.74 lakh shares of the firm changed hands amounting to a turnover of Rs 38.27 crore on BSE. The stock has a beta of 0.9, indicating low volatility in a year.
In terms of technicals, the relative strength index (RSI) of Persistent Systems stood at 42.6, signaling it's trading neither in the overbought nor in the oversold zone.
The stock is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
In the last quarter, Persistent Systems reported a 39% YoY rise in profit for the June quarter. Net profit came at Rs 424.93 crore in the June 2025 quarter against Rs 306.41 crore in the June 2024 quarter. PAT rose 7.37% on a QoQ basis from Rs 396 crore. Revenue climbed 21.78% YoY to Rs 3,333 crore in Q1 against Rs 2737 crore in the corresponding quarter a year ago. Revenue rose 2.82% on a QoQ basis from Rs 3248 crore.
In dollar terms, Persistent clocked $389.7 million revenue in Q1 FY26 with 18.8% Y-o-Y growth.
Persistent Systems share price today: Shares of mid-tier IT services company Persistent Systems tanked over 9% today after the firm reported its Q1 earnings. Persistent Systems stock slipped 9.29% to a low of Rs 5084.15 in the current session against the previous close of Rs 5605.35 on BSE. Market cap of the firm fell to Rs 80,094 crore. The stock opened lower at Rs 5,541.50 today.
Choice Equities expects the growth in margins of the IT firm to slow down.
According to Choice Institutional Equities, factors such as pricing, utilization, and SG&A efficiency lead to an outlook of conservative margin expansion to 16.3% by FY27E. The stock took a hit in the morning session today.
Brokerage JM Financial has maintained its buy call on the IT stock. However, it said the firm's 3.3% QoQ growth in constant currency term, came below its estimates of 4%. This could have impacted investor sentiment in today's trade.
However, the growth was still creditable considering the current macro. Sequential growth also belies a still strong YoY growth of 18.8%
The brokerage lowered its price target by 20% to Rs 6720 against the earlier target of Rs 6770.
According to Nuvama Institutional Equities, Persistent Systems is logging industry-leading growth of 18.7 per cent YoY in Q1FY26. Its FY27 revenue target of $2 billion signals a strong CAGR of 19 per cent. All along, its margins and cashflow remain robust, it said.
"The stock is now trading at 40x P/E FY27 – which might appear expensive, but we find it justified given the 24 per cent earnings CAGR anticipated over FY25–27E; retain ‘BUY/SO’," Nuvama said.
MOFSL expects an 18 per cent dollar revenue growth for Persistent Systems, compounded annually over FY25-2. This combined with margin expansion, could lead to a 25 per cent EPS CAGR.
This places the company in a league of its own as a diversified product engineering and IT services player, MOFSL said.
"We largely maintain our estimates for FY26E/FY27E. Owing to its superior earnings growth trajectory, on a PEG basis, we believe the valuation still has room for upside. We value PSYS at 48x FY27E EPS. Reiterate BUY with a target of Rs 6,800," it said.
The multibagger stock has climbed 115% in two years and gained 1,231% in five years. Total 0.74 lakh shares of the firm changed hands amounting to a turnover of Rs 38.27 crore on BSE. The stock has a beta of 0.9, indicating low volatility in a year.
In terms of technicals, the relative strength index (RSI) of Persistent Systems stood at 42.6, signaling it's trading neither in the overbought nor in the oversold zone.
The stock is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
In the last quarter, Persistent Systems reported a 39% YoY rise in profit for the June quarter. Net profit came at Rs 424.93 crore in the June 2025 quarter against Rs 306.41 crore in the June 2024 quarter. PAT rose 7.37% on a QoQ basis from Rs 396 crore. Revenue climbed 21.78% YoY to Rs 3,333 crore in Q1 against Rs 2737 crore in the corresponding quarter a year ago. Revenue rose 2.82% on a QoQ basis from Rs 3248 crore.
In dollar terms, Persistent clocked $389.7 million revenue in Q1 FY26 with 18.8% Y-o-Y growth.