Persistent beats demand dip in Q2. Can it hit $2 bn revenue?

Persistent Systems Ltd is handling the muted demand scenario in the IT sector well. In Q2FY26, the tier-II company’s sequential constant currency revenue grew 4.4%, exceeding the consensus estimate of 3.5%.

- Manvi Agarwal [e-mail]

This pushed the stock up more than 8% in the past two days. Growth was broadbased, led by momentum in the banking, financial services, and insurance (BFSI) vertical, healthcare and the Europe geography.

After a muted first quarter, lender fared better on many paramdeal wins gained traction in Q2FY26, aiding revenue visibility. The trailing 12-month total contract value rose 15% year-on-year (yo-y) to $609 million, implying a 1.5x bookto-bill ratio, while quarterly annual contract value bookings grew 28%.

Given the robust deal pipeline and strong execution seen so far, the management reiterated its $2 billion revenue ambition for FY27. It is banking on strong growth in FY26 led by BFSI and hi-tech, with healthcare gradually recovering.

Earnings before interest and tax (Ebit) margin rose 80 bps q-o-q to 16.3% in Q2FY26, beating the 15.7% estimate. Lower software costs, currency gains, and offshore shift offset higher provisions and softer utilisation.