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Please refer to important disclosures at the end of this report
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Persistent Systems build software that drives the business of its customers;
enterprises and software product companies with software at the core of their
digital transformation. It is also focusing on three industries – Financial
Services (FSI), Healthcare & Life Sciences and Industrial IoT. Persistent has
given out a CAGR of 15.1% for 5 years ended FY19. In Q2FY20 also its
sales grew by ~6% supported by growth in digital segment. The company
which derives its major revenue from international clients added 25 new
clients to its portfolio in the said quarter. In the ongoing quarter, it has
already won few good deals worth USD 3mln in the Financial and Hi-Tech
segments. Utilisation also improved from 81.9% to 82.9%. All these factors
give a positive view of the company’s future. Onsite cost as a percentage of
sales also has come down helping the company deliver better profitability.
There’s a steady growth in offshore revenues and the management also is
confident about the company’s future.
ON the asset and cash management side also the company looks stable
zero debt and steady increase in cash flows. The cash from operations
increased to `432cr in FY19 from `421cr in FY18. Also the working capital
days shrunk to 30days from 36 days in FY18. Currently, the stock trades at
2.2x of its book value and delivers 21.8% RoCE. With concrete business and
steady returns, we recommend BUY on the stock.
BUY
CMP `570
52 Week High / Low
700/469
Avg. Daily Volume
5,258
IT
Market Cap (` cr)
4,386
10
BSE Sensex
37,880
Nifty
11,235
Face Value (`)
Reuters Code
PERS.BO
PSYS IN
0.3
Jaikishan Parmar
022 – 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
Persistent Systems Ltd
Others | IT
Oct 10, 2019
2
Persistent Systems |IT
2
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Persistent Systems
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)