Persistent Systems Share Price
Falls 7% After Q1 FY26 Results, But Analysts Remain Bullish on Long-Term Growth
July 24,
2025 | FlipTheLoss Newsroom
Shares of PersistentSystems Ltd took a sharp 7.3% dip in early trade on Thursday after the
company reported its Q1 FY26 earnings. While the revenue grew by 3.3% in constant currency terms to $389.7 million,
the performance fell short of market expectations amid global macroeconomic
uncertainties.
Despite the initial market reaction, brokerages maintain a bullish stance on the mid-cap IT major’s long-term prospects.
Q1 FY26 Highlights
| 🧾 Metric | 📍 Q1 FY26 Result |
|---|---|
| Revenue Growth (USD) | +3.9% YoY / +3.3% CC |
| Total Revenue | $389.7 million |
| EBIT Margin | 15.5% (↓10 bps QoQ) |
| Core Margin (Adj. for ESOP) | ~13.2% (↓240 bps) |
| Top Performing Vertical | BFSI (+9% QoQ) |
| Underperforming Sector | Healthcare (-1.9% QoQ) |
| Stock Price at 9:45 AM (NSE) | ₹5,196.50 (↓7.3%) |
Sector-Wise Revenue Breakdown
·
BFSI
(Banking, Financial Services & Insurance): Up 9% QoQ –
leading growth
·
Software,
Hi-Tech & Emerging Industries: Up 3.6% QoQ
· Healthcare & Lifesciences: Down 1.9% – due to planned offshore transitions
Margin Concerns & Cost Adjustments
While Persistent Systems managed a 15.5% EBIT margin, it included a 230 bps benefit from reduced ESOP costs.
The core margin, after adjusting
for these benefits, stood at 13.2%,
signaling a 240 bps contraction QoQ.
Management attributes this to ongoing cost optimization and offshore transitions. However, the company remains committed to expanding margins by 200-300 bps over the medium term.
Management Outlook: Medium-Term Confidence Intact
Persistent’s leadership acknowledged near-term
volatility due to macro and geopolitical
uncertainties, but expressed strong confidence in medium-term growth momentum. For FY26, the firm expects all verticals to
grow, led by:
1.
BFSI
2.
Hi-Tech
3. Healthcare
Expert Take
“Persistent's Q1 earnings show resilience in BFSI and Hi-Tech, even though margins are under short-term pressure. The company's core fundamentals and strategic clarity keep investor sentiment stable in the medium term,” said a market analyst at FlipTheLoss.
Key Takeaways for Investors
·
Short-term
volatility due to macro pressures shouldn't overshadow long-term
potential.
·
BFSI and
Tech segments are poised to lead recovery in coming quarters.
· Brokerages remain confident, though valuations are currently demanding.
Final Word
Persistent Systems may have disappointed the
street in the short term with its Q1 FY26 results, but the overall story
remains one of steady growth, sector leadership, and long-term optimism.
Long-term investors might consider this dip as a potential entry opportunity, especially if the company delivers on its margin expansion goals.
Disclaimer
This article is for informational purposes only. Please consult a certified financial advisor before making any investment decisions.
