Buy Persistent Systems, target price Rs 5,020: IIFL

IIFL has buy call on Persistent Systems with a target price of Rs 5,020. The time period given by analyst is year when the stock price can reach defined target.

Persistent Systems, incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 34,756.18 crore) operating in IT Software sector.

Investment Rationale
Persistent Systems (PSYS) has made deep investments in the past 18 months, to build a robust cloud partner ecosystem with key cloud providers globally. Via a series of acquisitions worth $220 million, PSYS has one of the most potent cloud capabilities now among mid-cap peers that would ensure that its go-to-market strategy revolving around cloud & product engineering is aligned with its customers’ transformation journey.


The brokerage believes PSYS is well-positioned to continue driving industry-leading growth and surprise the Street on its growth trajectory.

IIFL incorporates PSYS’ Data Glove and MediaAgility acquisitions and forecasts 28% USD revenue/EPS Cagr over FY22ii-24ii. The brokerage maintains BUY; PSYS remains their top mid-cap pick.

Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 1,522.38 crore, up 10.03% from last quarter's income of Rs 1,383.66 crore and up 37.72% from last year's same quarter income of Rs 1,105.41 crore. The company has reported net profit after tax of Rs 176.40 crore in the latest quarter.

Promoter/FII Holdings
Promoters held 31.26 per cent stake in the company as of 31-Dec-2021, while FIIs owned 19.92 per cent, DIIs 26.87 per cent.