Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    

| More

Result Update: Persistent Systems Ltd - BUY - TP Rs.1025 - Kotak

Posted On: 2018-08-05 07:50:25

Persistent Systems expects its robust pipeline to drive growth, going forward. The Company alluded that it is aggressively investing in sales and marketing which will boost its topline. Wage hike in Q2FY19 will impact its margins (250 bps impact) but company is confident of margin improvement in FY19. With strong balance sheet, it is looking for acquisitions of smaller businesses in healthcare, data and machine learning, and which can support geographical expansion. Persistent's consolidated revenue increased by 6% qoq in US$ terms to US$ 124 mn (+9% yoy) led by 30% qoq (base effect) and 10% yoy jump in high-margin IP revenue (US$ 34mn).

Key Highlights

- Consolidated revenues increased by 11% qoq and 15% yoy to Rs.8.3 bn supported by 46% qoq (partly base effect) and 26% yoy jump in Alliance (IBM) revenue. Notably, Digital revenue declined marginally on qoq basis to Rs.1.79 bn (-1% qoq) due to some projects completed but there was some delay in commissioning of new projects. However, the company's management highlighted that it is confident of achieving its full year digital revenue target in 9MFY19.

- Recently, it has invested in and entered into a strategic partnership with US based big data as a service firm, Cazena. The partnership combines Cazena's Big data as a service platform with Persistent's ShareInsights analytic solution and machine learning and artificial intelligence data solutions to create a self-service data lake.

- Notably, European region contributed 12% (highest ever) of the total revenue while the North American business went below 80% (first time) reflecting Persistent's focus and investments made in Europe. In Europe, it has already added 15 people and expects to add 3 more people in sales and marketing team.

- The company has realigned its business segments. PLM has moved to alliance segment and NEURO has been sifted to Accelerite business.

- The board has recommended a final dividend of Rs.3/share resulting in a total dividend of Rs.10/share for FY18.

Valuation & outlook

- We expect Persistent to report an EPS of Rs.52.2/share in FY19E and an EPS of Rs. 65.1/share in FY20E. Management pointed to a strong pipeline with significant wins particularly in the field of Neuro sciences. Margin improvement and strong revenue visibility makes us positive on its growth prospects.

- We maintain BUY rating on Persistent and a multiple based price target of Rs.1,025/share. Additionally, cash rich balance sheet, strong free cash flow and healthy return ratios (ROE 16+% and ROCE 18+%) also provide high comfort. At CMP, the stock is valued at 7.9x EV/EBITDA and 12.7x P/E on FY20 basis. We have valued the stock at 15.6x PE multiple at a discount to its peers.

Shares of PERSISTENT SYSTEMS LTD. was last trading in BSE at Rs.837.9 as compared to the previous close of Rs. 830.45. The total number of shares traded during the day was 7271 in over 509 trades.

The stock hit an intraday high of Rs. 840.4 and intraday low of 826. The net turnover during the day was Rs. 6091779.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Karia Can Company Ltd Q1FY19 net profit slips to Rs. 1.88 crore

Result Update: Bajaj Electricals Ltd - SELL - TP Rs.545 - Kotak

Result Update: Gabriel India Ltd - BUY - TP Rs.185 - Kotak

Result Update: Blue Star Ltd - ACCUMULATE - TP Rs.743 - Kotak

Result Update: The Phoenix Mills Ltd - ACCUMULATE - TP Rs.707 - Kotak

Result Update: NMDC Ltd - BUY - TP Rs.125 - Kotak

Result Update: National Aluminium Company Ltd - BUY - TP Rs.100 - Kotak

Result Update: PNC Infratech Ltd - BUY - TP Rs.219 - Kotak

Result Update: Insecticides India Ltd - BUY - TP Rs.892 - Kotak

Result Update: Mirza International Ltd - BUY - TP Rs.120 - Kotak

Wonderla Holidays Ltd - Kotak

Result Update: Greenply Industries Ltd - BUY - TP Rs.286 - Kotak

Result Update: Praj Industries Ltd - ACCUMULATE - TP Rs.89 - Kotak

Cholamandalam Investment & Finance Co. Ltd - Outperformer - Centrum

Initial Public Offer: CreditAccess Grameen Ltd - NOT RATED - Kotak

Result Update: Adani Ports and SEZ - BUY - TP Rs.485 - Kotak

Result Update: Carborundum Universal Limited - BUY - TP Rs.420 - Kotak

Result Update: Arvind Ltd - BUY - TP Rs.500 - Kotak

Result Update: Indocount Industries Limited - BUY - TP Rs.103 - Kotak

Result Update: Mahindra & Mahindra Ltd - ACCUMULATE - TP Rs.984 - Kotak

Initiating Coverage: Essel Propack Ltd - BUY - TP Rs.140 - Kotak

Sector Update: Natural Gas Sector - Kotak

Analyst Meet Update: Hero MotoCorp Ltd - ACCUMULATE - TP Rs.3473 - Kotak

Result Update: Time Technoplast Ltd - BUY - TP Rs.195 - Kotak

Result Update: VIP Industries Ltd - ACCUMULATE - TP Rs.570 - Kotak

Result Update: Marico Ltd - ACCUMULATE - TP Rs.375 - Kotak

Result Update: Mold-Tek Packaging Ltd - BUY - TP Rs.351 - Kotak

Result Update: Central Depository Services (India) Ltd - BUY - TP Rs.320 - Kotak

Result Update: Apollo Tyres Ltd - ACCUMULATE - TP Rs.301 - Kotak

Result Update: Akzo Nobel India Ltd - BUY - TP Rs.2200 - Kotak

Result Update: Jindal Stainless (Hisar) Ltd - BUY - TP Rs.227 - Kotak

Result Update: Tata Motors Ltd - REDUCE - TP Rs.277 - Kotak

Result Update: Bharat Electonics Ltd - BUY - TP Rs.135 - Kotak

Result Update: Bluedart Express Ltd - SELL - TP Rs.3215 - Kotak

Result Update: Supreme Industries Ltd - ACCUMULATE - TP Rs.1324 - Kotak

Result Update: Gujarat State Petronet Ltd - SELL - TP Rs.182 - Kotak

Market Strategy: Monthly Outlook for August 2018 - Kotak

Auto Industry Volume Update: July 2018 - Kotak

Result Update: Genus Power Ltd - BUY - TP Rs.58 - Kotak

Result Update: Mahanagar Gas Ltd - ACCUMULATE - TP Rs.1030 - Kotak

Result Update: Castrol India Ltd - BUY - TP Rs.195 - Kotak

Q1 FY19 Result Update: Chennai Petroleum Corporation Ltd - BUY - TP Rs.373 - Kotak

Result Update: Escorts Ltd - ACCUMULATE - TP Rs.958 - Kotak

Result Update: Shree Cements Ltd - ACCUMULATE - TP Rs.18487 - Kotak

Result Update: Container Corporation of India Ltd - BUY - TP Rs.775 - Kotak

Result Update: NIIT Ltd - BUY - TP Rs.125 - Kotak

Result Update: Petronet LNG Ltd - BUY - TP Rs.267 - Kotak

Optiemus Infracom Ltd launches BlackBerry® Evolve and BlackBerry® EvolveX

Result Update: Quess Corp Ltd - BUY - TP Rs.1302 - Kotak

Result Update: ITC Ltd - BUY - TP Rs.330 - Kotak

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018