JPMorgan maintains its Overweight (OW) rating on Persistent Systems with a target price of ₹6,100, post-management interactions. The brokerage noted Persistent’s growth outperformance due to:
- Strong client mining, vendor consolidation wins, and a robust GenAI pivot.
- BFSI and Healthcare verticals to lead growth, while Hitech is expected to gradually pick up.
- Management sees optimism post US elections and possible Fed rate cuts, though client budgets will reflect these trends gradually.
Persistent reiterated its FY27 revenue target of $2 billion, alongside a 200-300 bps margin expansion over the next 2-3 years.
Key growth priorities include leveraging GenAI for ~25% productivity gains, which are expected to boost volumes without deflationary pressures. M&A efforts will focus on expanding into Europe and adding new capabilities, while immigration concerns are seen as easing.
Persistent’s long-term growth outlook remains strong, with utilization rates and operating efficiencies driving margins.
