Persistent Systems Q1 Results Declared: Net profit Surges 40%, Stock Gains 2%

Leading information technology company Persistent Systems Ltd on Friday declared a 40% surge in its June quarter net profit to Rs 211.6 crore. The Pune-based company announced a 52.7% growth in its revenue to Rs 1,878 core.

The stock of the company also reacted positively to the news and gained 1.96% at the close of the trade. The current market price of the stock is Rs 3632 apiece with the 52-week high at Rs 4987 apiece and 52-week low at Rs 2813 apiece. The market capitalisation of the stock is Rs 27,763 crore, according to a PTI report.

Its chief executive Sandeep Kalra said the company is not very worried about the macro situation, including threats of recession in its largest market - the US, which has witnessed massive rate hikes by the central bank because of record inflation.
The company, which reported a total contract value of USD 394 million during the reporter quarter, is observing cautiously the developments but is confident of business momentum going ahead, as per the PTI report.

He said even in a recessionary environment, the services provided by IT offshoring companies are relevant that will lead to better business performance.

Its operating profit margin widened to 17.7 per cent compared to 17.2 per cent in the preceding March quarter and was benefitted majorly by the currency tailwinds.
A dip in intellectual property-related revenue and the hiring of over 3,000 people were the profit margin headwinds, added the PTI report.

Its chief financial officer Sunil Sapre said it will face the pressure of up to 3 per cent on the margins in the second quarter as its average pay hikes of over 10 per cent for Indian staffers and 5 per cent for overseas ones take effect from July 1.

The company will rely on levers like increasing the utilisation and decreasing the reliance NSE 0.68 % on sub-contracted staff as its own staff can now travel to client locations, he said.