Nomura has maintained its neutral rating on Persistent Systems with a target price of ₹6,100 per share, even as the company delivered a margin beat in Q3FY26.
The brokerage noted that revenue growth for the quarter was largely in line with expectations, while margins exceeded estimates, driven by AI platform-led efficiencies and tool-based pricing models. Deal wins remained healthy, supporting near-term revenue visibility.
Reflecting the improved margin performance, Nomura has raised its FY27–28 EPS estimates by around 2%. However, the brokerage believes valuation remains demanding, with Persistent currently trading at around 41.5x FY27 forward earnings.
Nomura highlighted that while operational execution remains strong, the current valuation leaves limited room for upside relative to peers. As a result, it continues to prefer Coforge within the mid-cap Indian IT space, where it sees a more attractive risk-reward balance.
Overall, Nomura views Persistent as a high-quality franchise but believes much of the positive outlook is already priced into the stock.
Disclaimer: The views and recommendations above are those of Nomura. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
