Persistent Systems bullish on growth; to hire 1,500 next fiscal

MUMBAI: Mid-sized software products firm, Persistent Systems, is targeting to hire 1,500 people next fiscal as it sees a steady surge in demand from key markets.

"We will be needing 1,500 more people next fiscal," the Pune-headquartered company's CMD Anand Deshpande told over the weekend, saying the company is positive about the business environment.

He, however, added that the company decides on lateral hirings on a monthly basis.

In 2014, it had made a net addition of nearly 700 employees and the total headcount currently stands at 8,296.

The company had posted a net profit of Rs 74.46 crore for the December quarter which is 16 per cent higher than in the same period last fiscal and 4.4 per cent higher than the preceding September quarter.

The revenue for the quarter rose 6.6 per cent over the preceding quarter at Rs 494.6 crore.

Deshpande said this is an encouraging development, given the very low growth observed in the third quarter over the last four years.

He said the company expects the same growth momentum to continue and exuded confidence about the next fiscal as well.

The higher amount of work done during December quarter led to the utilisation rate surging by over 3 percentage points in as many months to over 74 per cent but Deshpande said this will come down once the trainees start joining.

"There is nothing unusual, new business is coming and we utilised the bench better. The number will move up next quarter but will go down as the new employees join," he said.

When asked about the reported layoffs of middle-level staff at TCS and other rivals and if Persistent would be interested in hiring them, Deshpande said, "If we find good people, we will look at them."

However, he clarified that the business in which TCS is engaged is different from what Persistent does.

Deshpande also came out in support of laying-off people who are not delivering, saying performance should be continuously monitored.

During the December quarter, there was an almost Rs 5 crore increase over September quarter in its marketing expenses at Rs 46.53 crore which was one of the reasons that trimmed its operating margin to 20.1 per cent.

Deshpande said the company is focusing on serving non-IT businesses which resulted in fatter spends, adding that this will continue at the same elevated level.

Apart from that, Rs 5 crore increase in employee benefits due to recalculation of gratuity and other retirement benefits and a dip in forex gains to Rs 12.9 crore as against Rs 15.5 crore in the year-ago period, also impacted the margin.