PERSISTENT - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.2

📊 Core Financials Analysis

Profitability

ROE: 20.9% and ROCE: 28.4% — excellent return metrics, indicating strong capital efficiency.

EPS: ₹82.6 — solid earnings per share, reflecting consistent bottom-line growth.

PAT Qtr: ₹374 Cr vs ₹288 Cr — a robust 50.8% jump, signaling strong operational momentum.

Balance Sheet & Cash Flow

Debt-to-equity: 0.04 — virtually debt-free, a major strength.

Dividend Yield: 0.63% — modest, but consistent with a growth-oriented tech firm.

Strong cash flows inferred from low debt and rising profits.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 68.0 Richly valued vs industry PE of 30.0

P/B Ratio ~14.4 High, but justified by premium ROE

PEG Ratio 3.49 Overvalued relative to growth

Intrinsic Value ₹4,800–₹5,100 (est.) Current price ~9–15% above fair value

🧠 Business Model & Competitive Edge

Company Profile: Persistent Systems is a leading digital engineering and cloud transformation company.

Strengths

Deep expertise in cloud, data, AI/ML, and enterprise software.

Strong partnerships with Salesforce, Microsoft, AWS, and IBM.

High-quality client base across BFSI, healthcare, and tech verticals.

Growth Drivers

Expanding global delivery footprint.

Strong order book and deal wins in digital transformation.

EPS and revenue growth consistently outperforming peers

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📈 Technical & Sentiment Overview

RSI: 60.5 — mildly bullish, nearing overbought zone.

MACD: 37.7 — positive momentum, trend continuation likely.

DMA 50 & 200: Price hovering near both — consolidation phase.

Volume: Above weekly average — active investor interest.

FII/DII Holding: Slight FII dip, DII increase — mixed institutional sentiment.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹5,000–₹5,300 — closer to intrinsic value and technical support.

Holding Strategy

Long-term hold recommended for investors seeking exposure to high-growth digital transformation.

Price targets based on future earnings range from ₹5,805 in 2025 to ₹7,777 by 2027

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Ideal for portfolios focused on tech innovation and consistent compounding.

Persistent Systems is a high-quality tech compounder with strong fundamentals and global tailwinds. If you're building a portfolio of digital-first leaders, this one deserves serious attention. Want to compare it with LTIMindtree or Tata Elxsi next?

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