Persistent Systems shares drop over 5% as earnings dip despite revenue surge

What Happened

Persistent Systems shares fell more than 5% on Friday after the company posted its September‑quarter FY27 results. The stock opened at ₹5,600, below Thursday’s close of ₹5,840, and touched an intraday low of ₹5,492 on October 16. The firm reported a 5% year‑on‑year rise in consolidated profit after tax (PAT) to ₹495.15 crore, excluding exceptional items. After accounting for an exceptional expense of ₹185.34 crore linked to its proposed acquisition of Nagarro, reported PAT fell 25.4% to ₹351.51 crore. Revenue grew 20.8% year‑on‑year in constant‑currency terms and rose 30.3% in rupee terms to ₹4,663.9 crore, while dollar‑denominated revenue increased 20% to $487.6 million. On a sequential basis, revenue rose 8.4% in rupee terms and 7.8% in dollars, marking the 26th straight quarter of growth. Earnings per share dropped 26% to ₹22.40. EBIT climbed 19.5% year‑on‑year to ₹697.72 crore but the margin fell to 15% from 16.3% a year earlier. EBITDA rose 26.4% to ₹864.4 crore, with the margin easing to 18.5% from 19.1% in Q2 FY26.

Analyst View

Mahesh M Ojha, vice‑president of research at Kantilal Chhaganlal Securities, said the stock appears positive from a trading standpoint. He suggested a stop‑loss around ₹5,380 and listed target levels of ₹5,825, ₹5,950 and ₹6,150 if bullish momentum continues, urging traders to stick to strict stop‑loss discipline.

Context

Persistent Systems is an Indian software services firm that has posted revenue growth for 26 consecutive quarters. The market’s reaction shows investors weigh strong top‑line growth against one‑time acquisition costs that cut profitability.