HSBC has maintained a ‘Hold’ rating on Persistent Systems, setting a target price of ₹5,650 per share, as uncertainty over global IT spending in 2025 weighs on near-term growth prospects.
The company’s management remains confident about gaining market share, but the overall IT sector is experiencing slower discretionary spending. Despite this, Persistent expects growth in FY26 to be broad-based, and the management is targeting $2 billion in revenue by FY27, implying a 19% CAGR (Compound Annual Growth Rate).
Persistent has been the top-performing IT stock among its peers, but valuation remains a concern, with the stock currently trading at 55x FY26 estimated earnings. HSBC believes that while the company’s long-term potential remains intact, the high valuation makes it less attractive for fresh investments at current levels.
