Persistent Systems - Q4FY13 Result Update - SPA

Persistent's (PSL) Q4FY13 revenue of $62.1mn (SPAe: $64mn) was lower than expected. Being a seasonally strong quarter for IP business the decline of the same was unwarranted. The growth mainly came from IT services business (Product Engineering and Platform Solutions) on the back of higher realizations both at onsite and offshore. We expect improvement in realizations to continue into H1FY14 on the back of recent high bill rate acquisitions, with volume growth returning only by H2FY14.

Due to recent run-up in prices and little headroom for further price improvement we continue to recommend HOLD with a Target Price of INR 585 based on 9x FY15E earnings.

Shares of Persistent Systems Ltd was last trading in BSE at Rs.552.45, up by Rs.7.50 or 1.38%. The stock hit an intraday high of Rs.575 and low of Rs.524.95.

The total traded quantity was 16224 compared to 2 week average of 4656.

Source : Equity Bulls

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