Persistent Systems shares: Can the multibagger IT stock continue its winning run?

Shares of Persistent Systems Ltd have tripled investor wealth in two years. Persistent Systems stock clocked 230% returns against 54.70% rise in the BSE IT index during the period.  At the current level, the IT sector stock has risen 96.54% from its 52-week low of Rs 3,232.60 reached on June 4 last year. Persistent Systems is likely to a log growth of 4.7 per cent in its Q3 earnings. 
 
In the current session, Persistent Systems stock climbed 1.5 percent to Rs 6400 on Tuesday against the previous close of Rs 6305.15 on BSE. Market cap of Persistent Systems stood at Rs 98,872 crore on BSE. 

The stock opened higher at Rs 6315 today. It has climbed 72.36% in a year and gained 179% in three years. Total 3549 shares of the firm changed hands amounting to a turnover of Rs 2.25 crore on BSE.    

The stock has a beta of 0.9, indicating low volatility in a year. It is trading in neither in the overbought nor in the oversold territory with a RSI of 50.8. Persistent Systems shares are trading lower than the 5 day, 10 day, 20 day and higher than the 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

Incred Equities has maintained 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. 

Global brokerage Macquarie has maintained its outperform rating on the IT stock with a price target of Rs 6,759. 

Mirae Asset Sharekhan has a price target of Rs 7,280. 

The brokerage said demand environment is expected to improve, led by the rate cut cycle in the US and end of US election uncertainties, which would expedite Persistent’s growth steadily, leading it to achieve its aspirational revenue target of $2 billion by FY2027.

Key risks to the brokerage's assumptions are rupee appreciation and/or adverse cross-currency movements. Contagion effect of the banking crisis, macro headwinds, and recession in the US can moderate the pace of technology spending.

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.