Persistent Systems shares at Rs 7,000? Analysts raise target prices after Q2 results

Persistent Systems delivered another strong quarter, with revenue rising 4.4 per cent QoQ in constant currency terms (up 17.6 per cent YoY) to $406.2 million — ahead of the 3.7 per cent growth estimated by analysts. EBIT margin expanded 80 basis points sequentially to 16.3 per cent, beating the expected 15.6 per cent. Total contract value (TCV) came in at $609 million, up 15 per cent YoY.

Analysts said Persistent’s consistent revenue growth and expanding margins are driving industry-leading earnings momentum, supporting further stock outperformance despite macro headwinds.

Nuvama said Persistent continued to post sector-leading growth, with 17.6 per cent YoY revenue rise in Q2FY26 and a strong trajectory toward its FY27 revenue goal of $2 billion, implying an 18 per cent CAGR. “Margins and cash flows remain solid. The stock trades at 38x FY27 P/E — high but justified given the 25 per cent earnings CAGR expected over FY25–27. Retain Buy,” it said.

This brokerage upped its target price on the stock to Rs 7,000 from Rs 6,600 earlier.

Choice Broking highlighted that Persistent has now logged 22 straight quarters of growth, with an annualised run rate above $1.60 billion. It remains on track to reach $2 billion by FY27. TCV was $609.20 million, including $350.80 million from new bookings, led by BFSI segment gains. Choice set a target price of Rs 6,050.

Nirmal Bang reaffirmed its Buy rating, raising the target to Rs 6,711 from Rs 6,496, valuing the stock at 46.8 times September 2027 EPS. “The company continues to outperform the industry despite demand headwinds, showing resilience to macro uncertainties — justifying its valuation premium,” it said.

MOFSL projected a 19 per cent dollar revenue CAGR for FY25–27, with margin gains driving 26 per cent EPS growth. It raised FY27 earnings estimates by 4 per cent, citing steady execution. “We value Persistent at 43x Jun’27E EPS and reiterate Buy with a target of Rs 6,550,” MOFSL said.

"We factor in margin expansion of 100bps over FY26E (and another 50bps by FY27E), while our FY25/FY26 estimates remain largely unchanged. Owing to its superior earnings growth trajectory, on a PEG basis, we believe the valuation still has room for upside," it said.

Nomura India has raised its FY26-28F EPS by 3-5 per cent and consequently its target price to Rs 5,200 from 5,000 earlier. "We retain our Neutral rating given the stock’s rich valuation. Persistent is trading at 37.5x FY27F EPS. We prefer Coforge (COFORGE IN, Buy) in the mid-cap India IT services space," it said.