Persistent Systems Q3 earnings today: Expectations on profit, revenue growth, EBIT margins and more

Technology services firm Persistent Systems Ltd will report its Q3 earnings today. Board of the firm is also likely to consider a proposal to consider a stock split on January 19. Brokerage Dolat Capital said the IT major is likely to report a 17% rise in Q3 profit at Rs 278.2 crore on a 14.8 increase in revenue to Rs 2490.7 crore.

The brokerage expects constant currency (CC) growth of 2.6% QoQ, led by a ramp-up of deal wins in BFSI & Healthcare vertical. Operating profit margins are expected to rise 70bps QoQ due to operating efficiencies.

The key commentary in the earnings , according to the brokerage, will include 1) Continuation of ACV momentum ($400 mn plus) and 2) Overall demand outlook of top 2 clients.

EBIT margin is likely to shrink by 97 bps to 14.4% against 15.4% in the corresponding quarter of last fiscal.

Another brokerage PhillipCapital expects the IT firm to report a 22.3% rise in Q3 profit on a year on year basis to Rs 291 crore. Profit is likely to climb 10.5% on a quarter-on-quarter basis.

Revenue is seen climbing 15% on a year on year basis to Rs 2493.7 crore. It is seen rising 3.4% on a quarter-on-quarter basis.

EBIT margin is likely to fall by 80 bps to 14.5% against 15.4% in the corresponding quarter of last fiscal.

PhillipCapital expects CC revenue growth 2.7% q-o-q on account of continued strong traction for product engineering services in Hitech vertical.

The brokerage said FY24 growth outlook, EBIT margins outlook, deal win & pipeline commentary and IP business outlook are among key metrics to watch out for during the Q3 earnings.

Axis Securities in an earnings preview report said, “Persistent Systems is expected to report robust revenue growth of 4.1% QoQ, primarily due to the ramp-up of large deals. Furthermore, we foresee operating margins to expand by 62bps due to lower onsite expenses. Key things to watch out for are a commentary on verticals and allied business.”

“Operating margins are likely to expand by 68bps aided by volume growth and easing of supply-side constraints. Digital transformation deals and ramp-up on new deal wins are key things to monitor,” the brokerage projected.

PAT is likely to rise 17.2% to Rs 279 crore on a year on year basis. On a quarter on quarter basis, profit may climb 6.1% from Rs 263 crore, said Axis Securities.

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