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Persistent Systems FY24 Revenue Insights

Persistent Systems is a global IT company specializing in software products and technology services, with a market capitalization of ₹74,736 Cr and a recent revenue growth of 14.5% for FY24. The company is heavily reliant on North America for 80.5% of its revenues and aims to increase its European market contribution while targeting $2 billion in revenue by FY25 and $5 billion by FY31. However, challenges such as geopolitical uncertainties and a sluggish demand environment may hinder its growth ambitions.

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Harshit Yadav
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192 views1 page

Persistent Systems FY24 Revenue Insights

Persistent Systems is a global IT company specializing in software products and technology services, with a market capitalization of ₹74,736 Cr and a recent revenue growth of 14.5% for FY24. The company is heavily reliant on North America for 80.5% of its revenues and aims to increase its European market contribution while targeting $2 billion in revenue by FY25 and $5 billion by FY31. However, challenges such as geopolitical uncertainties and a sluggish demand environment may hinder its growth ambitions.

Uploaded by

Harshit Yadav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

PERSISTENT SYSTEMS REPORT

Overview About
LTP ₹ 4,793 Persistent Systems is a global IT company specializing in software
Market Capitalization ₹ 74,736 Cr. products and technology services. It develops solutions in key next-
generation technology areas, including analytics, big data, cloud
52 week Range 6,789 / 3,232 computing, mobility, and social, for the telecommunications, life
sciences, healthcare, and banking and financial services verticals.

Key Financials Recent Performance


INR Cr FY22 FY23 FY24
➢ Showed consistent revenue growth, achieving 19 consecutive
Revenue 5711 8351 9822
quarters of quarter-on-quarter growth by Q3 FY25.
EBITDA 958 1519 1676 ➢ For FY24, revenue was $1,186 million, a growth of 14.5%.
➢ The revenue has grown at a CAGR of 32.9% and 23.9% in 3 and 5
OPM % 17.0 18.0 17.0
years respectively.
NPM % 12.1 11.0 11.1
Dependency on North America and 3 Verticals

Shareholding Pattern (%) ➢ Persistent is highly dependent on North America as it contributes


As on Dec-24 Sep-24 Dec-23
80.5% of the revenues.
➢ Due to this, the stock tumbled 9.68% on 3rd April after the
Promoters 30.66 30.66 31.06 imposition of reciprocal tariffs by the US govt.
FII 24.75 23.34 24.55
➢ Persistent currently serves only 3 verticals which are BFSI (31.7%),
Healthcare & Lifesciences (27.7%), and Software & Hi-Tech (40.7%).
DII 26.26 27.37 26.13

Others 18.31 18.63 18.25 Muted demand environment

➢ The demand environment is sluggish due to the changing


geopolitical landscape and macroeconomic uncertainty caused by
US reciprocal tariffs, due to which inflation would remain high in
the US and Fed rate cuts would be delayed.
➢ This would impact the discretionary spending on IT services by US
clients and thus revenues of Persistent Systems.
➢ The second key market for Persistent is Europe and the management
intends to increase its revenue contribution from Europe to 12-15%
from 8-9% currently but the macroeconomic conditions in Europe
also look gloomy.

Target Revenue and Challenges

➢ Persistent targets $2 Billion by FY25 and unveiled new target of $5


Billion by FY31.
➢ The FY31 revenue implies a 26% CAGR over FY27-FY31 versus 19%
CAGR (FY23-FY27) when the US$2bn target was set.
➢ 26% CAGR growth appears difficult to achieve with dependency on
North America and 3 key verticals. Persistent need to increase its
geographical presence and tap into a broader set of verticals like
retail to increase its addressable market.
➢ Persistent has emphasized that it will rely on organic growth (except
for Europe) to achieve its targets and it amplifies the difficulty.

Margin Performance and Guidance

➢ Near-term margin outlook focuses on maintenance rather than


significant expansion, while prioritizing revenue growth.
➢ Persistent has a medium-term aspiration to improve EBIT margins
by 200-300 basis points over the next 2-3 years.
➢ To achieve this, they will focus on pricing, non-linear revenues and
SG&A optimization.

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