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Buy Persistent Systems; target of Rs 3700: Emkay Global Financial

Buy Persistent Systems; target of Rs 3700: Emkay Global Financial
September 14
14:24 2021

Emkay Global Financial is bullish on Persistent Systems has recommended buy rating on the stock with a target price of Rs 3700 in its research report dated September 13, 2021.

Broker Research

September 14, 2021 / 01:42 PM IST

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Emkay Global Financial’s report on Persistent Systems

PSYS has seen a 5.6% CQGR in services revenue since Q1FY20, despite Covid-19 disruptions. It indicates healthy demand for the company’s offerings and early results of leadership augmentation, recalibrated sales incentive structure and strong execution. PSYS is seeing broad-based healthy demand and expects demand to remain strong in the next 3-5 years. It is confident of sustaining the revenue growth momentum on the back of broad-based demand, robust deal intake, healthy deal pipeline and new logo additions. PSYS is focusing on increasing the share of revenues from the Europe region in the next few years, organically and inorganically. It expects revenues from Europe to rise to 15-18% of total revenue in the next 3-5 years from 9.5% currently.

Outlook

Among our coverage companies, we expect PSYS to lead the pack in terms of organic revenue growth. A strong earnings trajectory (27.4% EPS CAGR over FY21-24E) and healthy cash generation should help to sustain higher valuations. Retain Buy with a TP (Sep’22E) of Rs3,700 at 33x Sep’23E EPS.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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