PERSISTENT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | PERSISTENT | Market Cap | 78,761 Cr. | Current Price | 4,993 ₹ | High / Low | 6,599 ₹ |
| Stock P/E | 46.3 | Book Value | 425 ₹ | Dividend Yield | 0.70 % | ROCE | 35.6 % |
| ROE | 26.8 % | Face Value | 5.00 ₹ | DMA 50 | 5,068 ₹ | DMA 200 | 5,425 ₹ |
| Chg in FII Hold | -0.68 % | Chg in DII Hold | 0.67 % | PAT Qtr | 420 Cr. | PAT Prev Qtr | 452 Cr. |
| RSI | 49.5 | MACD | -23.8 | Volume | 6,41,552 | Avg Vol 1Wk | 6,25,010 |
| Low price | 4,449 ₹ | High price | 6,599 ₹ | PEG Ratio | 1.63 | Debt to equity | 0.06 |
| 52w Index | 25.3 % | Qtr Profit Var | 49.6 % | EPS | 104 ₹ | Industry PE | 20.7 |
📊 Financial Overview: Persistent Systems has a market cap of ₹78,761 Cr with a current price of ₹4,993. The 52-week range is ₹6,599–4,449. Profitability is strong with ROE at 26.8% and ROCE at 35.6%. Debt-to-equity ratio of 0.06 indicates negligible leverage. PAT stood at ₹420 Cr compared to ₹452 Cr in the previous quarter, showing slight decline. EPS is ₹104, reflecting solid earnings capacity.
💰 Valuation Indicators: Stock P/E is 46.3, much higher than the industry average of 20.7, suggesting overvaluation. Book value is ₹425, giving a P/B ratio of ~11.7. PEG ratio of 1.63 indicates valuation is stretched relative to growth. Dividend yield of 0.70% provides modest shareholder returns. Intrinsic value appears lower than current price, limiting margin of safety.
💻 Business Model & Competitive Advantage: Persistent Systems operates in IT services, digital transformation, and software engineering. Its competitive advantage lies in strong R&D, global client base, and expertise in cloud and AI solutions. High margins, low debt, and strong return metrics highlight overall financial health, though valuation remains a concern.
📈 Entry Zone & Long-Term Guidance: The stock looks expensive at current levels. A better entry zone would be ₹4,600–4,800, closer to support levels. Long-term holding looks favorable given strong fundamentals, provided earnings growth stabilizes and valuations moderate.
Positive
- 📈 [Strong Returns](ca://s?q=Persistent_Systems_ROE_ROCE): ROE at 26.8% and ROCE at 35.6% are excellent.
- 🏦 [Low Debt](ca://s?q=Persistent_Systems_debt_to_equity): Debt-to-equity ratio of 0.06 shows strong balance sheet.
- 💻 [Digital Leadership](ca://s?q=Persistent_Systems_business_model): Strong presence in IT services and digital transformation.
Limitation
- ⚖️ [High Valuation](ca://s?q=Persistent_Systems_PE_ratio): P/E of 46.3 compared to industry average of 20.7.
- 📉 [Profit Decline](ca://s?q=Persistent_Systems_quarterly_profit): PAT fell from ₹452 Cr to ₹420 Cr QoQ.
- 📊 [PEG Ratio](ca://s?q=Persistent_Systems_PEG_ratio): PEG of 1.63 suggests valuation stretched relative to growth.
Company Negative News
- 📉 [FII Exit](ca://s?q=Persistent_Systems_FII_holdings): FII holdings decreased by -0.68%.
Company Positive News
- 📈 [DII Support](ca://s?q=Persistent_Systems_DII_holdings): DII holdings increased by +0.67%.
- 📊 [Technical Support](ca://s?q=Persistent_Systems_DMA_levels): Current price near DMA 50 (₹5,068) and DMA 200 (₹5,425) indicates support levels.
Industry
- 💻 [IT Services Sector](ca://s?q=India_IT_services_industry): Industry PE at 20.7, showing moderate valuation compared to Persistent.
- 📊 [Digital Transformation](ca://s?q=Global_digital_transformation_growth): Rising demand for cloud and AI solutions supports sector expansion.
Conclusion
⚖️ Persistent Systems’ fundamentals are strong with high profitability, low debt, and leadership in IT services. However, high valuation and profit decline limit attractiveness. Entry is advisable near ₹4,600–4,800 for better risk-reward. Long-term holding looks favorable if earnings growth stabilizes and valuations moderate.