Total deal wins declined 10% sequentially to $600.8 million from $674.5 million.
Despite the softer quarter, the company is still expected to deliver industry-leading growth of 17.4% in FY26, along with a 90 basis points expansion in margins.What brokerages recommend
Brokerage firm CLSA maintained an ‘Outperform’ rating but cut its price target to ₹6,520. It said that Persistent delivered a steady performance despite concerns around the ‘Saaspocalypse’ narrative and AI-led deflation in IT services.
Revenue growth, order bookings, and revenue per employee remained stable. However, CLSA pointed out two key negatives: margin pressure due to higher software license sales, and a moderation in the FY27 outlook.
The company now expects to achieve a $2 billion annualised revenue run-rate by Q4FY27, while guiding for EBIT margins in the 16-17% range over the next two years.ALSO READ | Tata Elxsi in focus after soft topline performance in Q4 but margins strong
HSBC retained a ‘Hold’ rating with a price target of ₹5,755. While it acknowledged Persistent’s sector-leading growth and its ability to offset weakness in top clients, it flagged a slightly softer FY27 outlook and rich valuations, with the stock trading at nearly a 100% premium to the sector.
JPMorgan maintained an ‘Overweight’ rating with a price target of ₹5,900. It described the quarter as mixed, with a revenue beat, margin miss, and strong TCV/ACV growth.
Growth was led by the healthcare segment, while improving deal momentum is seen supporting FY27 revenue visibility. Margins, excluding one-offs, stood at 17%, providing a stable base for FY27 guidance.
Nomura retained a ‘Neutral’ rating with a price target of ₹5,200, citing a modest miss in Q4 and margin pressure due to corporate development expenses.
The brokerage also lowered its FY27-28 EPS estimates by 2-4%, while citing elevated valuations.
Persistent Systems shares ended 0.82% higher on Tuesday at ₹5,369, ahead of the earnings announcement. The stock has risen 14% over the past month.
