Buy Persistent Systems, target price Rs 5090: HDFC Securities

HDFC Securities has buy call on Persistent Systems with a target price of Rs 5090. The current market price of Persistent Systems is Rs 3602. Time period given by analyst is one year when Persistent Systems Ltd. price can reach defined target.

Persistent Systems Ltd., incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 27763.29 Crore) operating in IT Software sector.

Persistent Systems Ltd. key Products/Revenue Segments include Software Services and Software Licence for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 1899.09 Crore, up 13.05 % from last quarter Total Income of Rs 1679.93 Crore and up 49.68 % from last year same quarter Total Income of Rs 1268.73 Crore. Company reported net profit after tax of Rs 211.61 Crore in latest quarter.

Investment Rationale
The brokerage has factored in USD revenue growth at +34.8/20.0% and EBITM at 13.1/13.8% for FY23/24E, resulting in FY22-24E EPS CAGR of 27%. At CMP, PSYS is trading at a PE of 31.5/25.0x FY23/24E.

Promoter/FII Holdings
Promoters held 31.26 per cent stake in the company as of 30-Jun-2022, while FIIs owned 20.45 per cent, DIIs 25.94 per cent.