Persistent Systems bulls expect market cap to double in four years, bears see 27% downside

Shares of Persistent Systems Ltd. are in focus on Friday, October 17, after the company's second quarter results beat revenue estimates but were a miss on margins. Its profit after tax (PAT) was hit by the Nagarro M&A deal impact.

Meanwhile, brokerages were largely positive on the stock post its quarterly earnings report. Analysts bullish on the stock expect the stock to test levels of ₹6,770, while the ones who are bearish on the stock, expect the stock to fall as much as 27% from current levels.

How Did Persistent Systems Fare In Q2?

Persistent Systems' constant currency (CC) revenue growth was at 7.8%, higher than estimates of 7%.

Its earnings before interest taxes (EBIT) margins declined by 100 basis points to 15% from 16% sequentially and were below estimates of 15.5% as well. The margin headwinds include wage hikes, lower utilisation and amortisation from a large deal, partially offset by tailwinds from lower selling, general and administrative expenses (SG&A) and favourable currency movements.