Persistent Systems Q3 Results Review - All Round Beat; Lead Indicators Continue To Shine: Dolat Capital
Persistent Systems posted healthy revenue of $264.4 mn, up 3.5% QoQ in CC terms, despite impact of furlough, Q3 seasonality.
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Dolat Capital Report
Persistent Systems Ltd. posted healthy revenue of $264.4 million, up 3.5% QoQ in constant currency terms. (our estimate: 3%), despite impact of furlough, Q3 seasonality of lower working days and continued challenge in the top-two clients. Although top two accounts were soft, growth in top 2-50 stood at 7% QoQ.
Vertical-wise, growth was led by hi-tech growing 4.1% QoQ, followed by healthcare at 2.9% QoQ, and banking, financial services and insurance growing 2.8% QoQ.
Operating profit margin stood at 15.4%, up 78 bps QoQ and well ahead of our estimate of 14.6%. Margin expansion was led by better utilisation, improved freshers billability, intellecutal property revenue mix, and forex gains. Announced dividend per share of Rs 28.
Strong execution and robust annual contract value additions (up 15% on trailing twelve months basis) continues suggesting Persistent Systems would clock strong growth in FY24E as well.
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