PERSISTENT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | PERSISTENT | Market Cap | 75,720 Cr. | Current Price | 4,800 ₹ | High / Low | 6,599 ₹ |
| Stock P/E | 44.5 | Book Value | 425 ₹ | Dividend Yield | 0.73 % | ROCE | 35.6 % |
| ROE | 26.8 % | Face Value | 5.00 ₹ | DMA 50 | 5,178 ₹ | DMA 200 | 5,505 ₹ |
| Chg in FII Hold | -0.68 % | Chg in DII Hold | 0.67 % | PAT Qtr | 420 Cr. | PAT Prev Qtr | 452 Cr. |
| RSI | 36.8 | MACD | -72.2 | Volume | 5,90,892 | Avg Vol 1Wk | 7,29,509 |
| Low price | 4,449 ₹ | High price | 6,599 ₹ | PEG Ratio | 1.57 | Debt to equity | 0.06 |
| 52w Index | 16.3 % | Qtr Profit Var | 49.6 % | EPS | 104 ₹ | Industry PE | 21.6 |
📊 PERSISTENT demonstrates strong fundamentals with ROE at 26.8% and ROCE at 35.6%, reflecting excellent capital efficiency. EPS of 104 ₹ supports earnings visibility, and the PEG ratio of 1.57 suggests growth is reasonably priced. The company is nearly debt-free (debt-to-equity 0.06), enhancing financial stability. P/E ratio of 44.5 is significantly higher than the industry average of 21.6, indicating premium valuation. Dividend yield of 0.73% provides modest income. However, quarterly PAT declined (452 Cr. → 420 Cr.), and technical indicators (RSI 36.8, MACD -72.2) show bearish momentum, suggesting caution in the near term.
💰 Ideal Entry Price Zone: 4,400 ₹ – 4,600 ₹, near its recent low (4,449 ₹), offering better risk-reward balance.
📈 Long-Term Holding Guidance: PERSISTENT is highly suitable for long-term holding (5+ years) given strong fundamentals, efficiency ratios, and growth potential in IT services. Investors should accumulate on dips but consider partial profit booking near 6,200–6,500 ₹ if valuations stretch without earnings support.
✅ Positive
- Strong ROE (26.8%) and ROCE (35.6%).
- EPS of 104 ₹ supports earnings visibility.
- PEG ratio of 1.57 indicates fair valuation relative to growth.
- Debt-to-equity ratio of 0.06 shows minimal leverage risk.
- DII holdings increased (+0.67%), reflecting domestic institutional support.
⚠️ Limitation
- High P/E (44.5) vs industry average (21.6), indicating premium valuation.
- Dividend yield modest at 0.73%.
- Quarterly PAT declined from 452 Cr. to 420 Cr.
- Technical weakness with RSI at 36.8 and MACD negative (-72.2).
📉 Company Negative News
- FII holdings decreased (-0.68%), showing reduced foreign investor confidence.
- Quarterly profit decline highlights earnings volatility.
📈 Company Positive News
- DII holdings increased (+0.67%), showing domestic institutional support.
- Strong efficiency ratios (ROE, ROCE) support long-term growth.
🏭 Industry
- Industry P/E at 21.6, much lower than PERSISTENT’s 44.5, highlighting premium valuation.
- IT services sector benefits from digital transformation demand but faces margin pressures.
🔎 Conclusion
PERSISTENT is a fundamentally strong company with excellent efficiency ratios and growth potential. While valuations are stretched, it remains a high-quality long-term compounder. Entry near 4,400–4,600 ₹ offers margin of safety, with upside potential toward 6,200–6,500 ₹. Long-term investors should accumulate on dips but exercise caution with near-term technical weakness.