Higher valuation hinges on ‘Persistent growth

Firm continues to outperform mid-, large-tier listed IT majors

- RAM PRASAD SAHU

The stock of mid-tier information technology (IT) major Persistent Systems has been one of the outperformers in the IT pack with a return of 5.3 per cent over the last year, while its peer index, the Nifty IT, is down 16.2 per cent over the same period. The strong September quarter (Q2FY26) result and upgrades by brokerages are positive but its ability to sustain growth momentum in a weak macroeconomic environment will be key for future gains. At the current levels, the stock is trading at a premium valuation of 38 times its FY27 earnings estimates.

The firm continues to outperform mid and large listed IT majors and Q2 was no different as it recorded revenue growth of 4.4 per cent sequentially and 17.6 per cent year-on-year (Y-o-Y). The growth was led by the banking financial services and insurance (BFSI) vertical, followed by software, hi-tech and emerging industries at 3.8 per cent.

Healthcare and life sciences reported growth of 2.2 per cent.