⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
PERSISTENT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | PERSISTENT | Market Cap | 95,742 Cr. | Current Price | 6,068 ₹ | High / Low | 6,599 ₹ |
| Stock P/E | 60.9 | Book Value | 420 ₹ | Dividend Yield | 0.58 % | ROCE | 28.4 % |
| ROE | 20.9 % | Face Value | 5.00 ₹ | DMA 50 | 6,206 ₹ | DMA 200 | 5,819 ₹ |
| Chg in FII Hold | 1.55 % | Chg in DII Hold | -0.80 % | PAT Qtr | 452 Cr. | PAT Prev Qtr | 459 Cr. |
| RSI | 41.0 | MACD | -52.6 | Volume | 2,88,278 | Avg Vol 1Wk | 4,65,975 |
| Low price | 4,149 ₹ | High price | 6,599 ₹ | PEG Ratio | 3.13 | Debt to equity | 0.05 |
| 52w Index | 78.3 % | Qtr Profit Var | 38.7 % | EPS | 96.4 ₹ | Industry PE | 23.9 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹452 Cr. vs. ₹459 Cr. previously, showing slight sequential decline but YoY profit variation is +38.7%. EPS at ₹96.4 reflects strong earnings power.
- Return Metrics: ROE at 20.9% and ROCE at 28.4% highlight excellent capital efficiency and profitability.
- Debt Position: Debt-to-equity ratio at 0.05 indicates negligible leverage, ensuring balance sheet strength.
- Cash Flow: Dividend yield of 0.58% provides modest shareholder returns alongside reinvestment for growth.
💹 Valuation Indicators
- P/E Ratio: 60.9, significantly higher than industry average of 23.9, indicating premium valuation.
- P/B Ratio: Current Price ₹6,068 vs. Book Value ₹420 → ~14.4, trading at a steep premium.
- PEG Ratio: 3.13, expensive relative to growth prospects.
- Intrinsic Value: Strong fundamentals justify premium, but current valuation appears stretched compared to peers.
💻 Business Model & Competitive Advantage
- Persistent Systems operates in IT services and digital transformation, focusing on cloud, AI, and software engineering.
- Competitive advantage lies in niche expertise, strong client relationships, and exposure to high-growth technology segments.
- High ROE and ROCE demonstrate operational excellence, though valuations remain demanding.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹5,600–5,900, closer to DMA 200 and below current price.
- Long-Term Holding: Suitable for investors seeking exposure to IT services with strong fundamentals; long-term compounding potential remains robust, but entry should be cautious given high valuation multiples.
Positive
- Strong ROE (20.9%) and ROCE (28.4%).
- Debt-to-equity ratio at 0.05 ensures negligible leverage risk.
- Quarterly profit growth YoY (+38.7%).
- FII holdings increased (+1.55%), showing foreign investor confidence.
Limitation
- High P/E ratio (60.9) compared to industry average (23.9).
- P/B ratio at ~14.4 indicates steep premium valuation.
- PEG ratio at 3.13 suggests expensive growth-adjusted valuation.
- Dividend yield modest at 0.58%.
Company Negative News
- DII holdings reduced (-0.80%), showing lower domestic institutional confidence.
- MACD negative (-52.6), signaling bearish momentum.
Company Positive News
- Quarterly PAT remains strong despite slight sequential decline.
- FII holdings increased significantly (+1.55%).
- RSI at 41.0 indicates stock is not overbought, potential for rebound.
Industry
- IT services industry P/E at 23.9, much lower than Persistent’s 60.9, highlighting premium valuation.
- Sector outlook supported by digital transformation, cloud adoption, and AI-driven demand.
Conclusion
- Persistent Systems demonstrates strong fundamentals, high efficiency, and negligible debt.
- Despite premium valuations, its consistent profitability and exposure to high-growth tech segments make it attractive for long-term investors.
- Accumulation near ₹5,600–5,900 is recommended, with strong potential for compounding, though cautious entry is advised given stretched multiples.
I can also create a side-by-side comparison with other IT service peers like Infosys, TCS, and HCL Tech to highlight how Persistent stacks up in terms of valuation, profitability, and growth. Would you like me to prepare that?