Shares of Persistent Systems snapped six sessions of losing streak on Tuesday after JP Morgan assigned an 'overweight' call on the stock. The global brokerage advised investors to 'buy this dip' amid the recent correction. It has assigned a target price of Rs 7,200. The brokerage called for buying the quality growth compounder stock, offering 30% potential upside. The brokerage expects 21%/29% revenue/PAT CAGR over FY25-27.
In the current session, Persistent Systems stock climbed 3.68 percent to Rs 5,739.85 on Tuesday against the previous close of Rs 5535.95 on BSE. Market cap of Persistent Systems stood at Rs 88,462 crore on BSE.
The stock opened higher at Rs 5590 today. It has climbed 27% in a year and gained 193% in three years. Total 0.14 lakh shares of the firm changed hands amounting to a turnover of Rs 8.10 crore on BSE.
The stock has a beta of 1, indicating average volatility in a year. It is trading in neither in the overbought nor in the oversold territory with a RSI of 36.1. Persistent Systems shares are trading lower than the 10 day, 20 day, 30 day, 50 day, 100 day but higher than the 150 day and 200 day moving averages.
The record high deals indicate high-teens revenue growth in FY26, said Morgan Stanley suggesting a new target of $5bn revenue by FY31, implying strong 26% CAGR over FY27-31. The brokerage expects potential for margin expansion from subcon reduction and operating leverage.
Brokerage Phillip Capital has a buy call on the IT stock with a price target of Rs 7,310.
"We raise our FY25-27 EPS estimates marginally by 1-2%, baking in higher USD/INR while keeping our growth and margins largely intact. We are forecasting 18.8%/18.4%/18.2% USD revenue growth and 14.6%/15.5%/16.5% EBIT Margins for FY25/26/27. We value Persistent at 50x FY27 EPS (vs 55x earlier), on moderation in TTM TCV growth, to arrive at price target of Rs 7310 (Rs 7910). Maintain BUY," said Phillip Capital.
Incred Equities has a hold call with a target price of Rs 6,863.
The brokerage said beat and upgrade cycle to continue with greenshoots in hi-tech vertical are expected to drive FY26 revenue higher.
The firm is on track to deliver the stated EBIT margin expansion in H2. Earnings revision is expected on the upside. The brokerage expects revenue, EBIT, PAT CAGR to come over FY25-27F 18%, 26% and 25%, respectively.
Persistent Systems is engaged in the business of providing software products and technology services. The company’s segments include banking, financial Services, and insurance (BFSI), healthcare & life sciences, and technology companies and emerging verticals.