PER­SIS­TENT SYS­TEMS

Flash News Investment - - RECOMMENDATIONS -

We had rec­om­mended Per­sis­tent Sys­tems to our read­ers in Vol­ume No 34, Is­sue No 45 (dated Aug 27, 2018), when the scrip was trad­ing at Rs 873. Our rec­om­men­da­tion was based on fac­tors such as ro­bust fi­nan­cials. In Q2FY19, the com­pany’s rev­enue was up by 9.8 per­cent YoY to Rs 835.6 crore. The rev­enue growth was missed as per mar­ket es­ti­mates due to drag in dig­i­tal ser­vices and IP-led busi­ness. Its EBITDA for the quar­ter grew by 24 per­cent YoY to Rs 143.6 crore and EBITDA mar­gin stood at 17.2 per­cent. Higher at­tri­tion con­tin­ued due to exit of sales em­ploy­ees at the start of the quar­ter. PAT was up by 6.7 per­cent YoY to Rs 88.1 crore. Healthy deals in the pipe­line would trig­ger com­pany’s topline and de­mand is ex­pected from Q3FY19 on­wards. Thus, we urge in­vestors to HOLD the scrip.

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