Multibagger IT stock in focus today on stellar Q1 earnings

Shares of Persistent Systems Ltd are in focus today after the IT firm reported a 33.9% rise in net profit for the June 2024 quarter. Net profit climbed to Rs 306.41 crore in the June quarter against Rs 228.76 crore a year ago. However, net profit fell 2.8% from Rs 315.3 crore in the March 2024 quarter. The multibagger stock ended 1.51% percent higher at Rs 4892.80 on Thursday against the previous close of Rs 4819.85 on BSE. Market cap of the firm rose to Rs 75,373.58 crore on BSE.

The stock opened lower at Rs 4815.05. It has climbed 33.64% this year and risen 96.68% in the last one year. It delivered multibagger returns of 200% in the last two years and 1507% in five years.

Total 0.19 lakh shares of the firm changed hands amounting to a turnover of Rs 9.19 crore on BSE.     

The stock has a beta of 0.6, indicating low volatility in a year.

In terms of technicals, the relative strength index (RSI) of Persistent Systems stock stands at76.3, signaling it's trading in the overbought zone. Persistent Systems stock is trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.   

Revenue from operations climbed 17.9% year-on-year to Rs 2,737.17 crore (highest ever) in Q1 from Rs 2,321,17 crore in the June 2023 quarter. Revenue rose 5.6% from Rs 2,590.5 crore in the January-March quarter.

Growth in Persistent Systems’ core business – software, hi-tech and emerging industries – came at 4.1%. Banking, financial services and insurance (BFSI) sector saw a growth of 8.9% to Rs 843.15 crore, boosting its overall revenue. Order booking for the quarter rose to $316.8 million in total contract value (TCV) from $462.8 million.

Operating margin in Q1 narrowed by 50 basis points to 14% from 14.5% in the previous three-month period and 14.9% a year ago.  In June, the IT company acquired New Jersey-based Starfish Associates for $20.7 million (about Rs 173 crore).

 Persistent Systems also announced that it has pivoted to an AI-led, Platform-driven services approach, deepening its hyperscaler partnerships and is developing a suite of innovative solutions.

“I am pleased to announce our 17th consecutive quarter of revenue growth, underscoring our clients’ sustained trust and confidence in us. Our continued success is driven by resilience, innovation, and a strategic focus on future readiness," said Sandeep Kalra, chief executive officer and executive director of Persistent Systems.

Persistent Systems Limited is engaged in the business of providing software products and technology services. The company’s segments include banking, financial services, and insurance (BFSI), Healthcare & Life Sciences, and Technology Companies and Emerging Verticals.