Technology company Persistent Systems on Tuesday, reported a 3.92% quarter-on-quarter (QoQ) growth in revenue to Rs 2,254.47 crore in the January to March quarter. Persistent’s net was up 5.7% QoQ to Rs 251.51 crore, however EBIT margins remained flat at 15.4%. Persistent Systems’ annual revenue for the first time crossed the billion-dollar mark in FY23. The company has announced a special 10% dividend to celebrate the landmark.

Persistent’s services business, which accounts for 93% of revenues, was up 5.5% while IP-led business declined by 14.6% during the quarter. Sunil Sapre, executive director and chief financial officer, Persistent Systems, said they were able to maintain margins due to multiple deals. Ramping up the utilisation of the pool of freshers also contributed to the margin with 3,000 freshers recruited last year getting deployed to projects and becoming billable, Sapre said. The company was planning to hire around 1,000 freshers this year. Attrition was down to 19.8% during the March quarter compared to 21.6% in the previous quarter.

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While they were not insulated from what was happening in the markets, as a product engineering company they had a nice differentiated business and a niche kind of presence, Sapre said. There was a ramp-down in a few top clients and the next two quarters were expected to be volatile. In the BFSI space, which accounted for 32% of the revenues only a third of the business came from banks and they did not have any exposure to regional banks in the US. Also, some of the impact on the banking business was offset by growth in the NBFC and fintech business.

The order booking for the fourth quarter was at $ 421.6 million in total contract value and at $ 310.4 million in annual contract value terms.

Further, the two acquisitions made by Persistent had completed one year of operations and one acquisition was going to complete a year next quarter, these would have an impact on revenue growth, Sapre said. The only weakness was in the hyperscaler businesses (Meta, Google, Amazon, Salseforce) which were passing through a redeployment phase but he expected situation to stabilize once rate hikes end in the US.

The next billion for Persistent would come from delivering innovations and being part of all the disruptive changes, Sapre said. The company has been working on deepening engagement with existing clients to do more with less and has been incentivising the sales team to offer multiple services. “This is a journey and it will take time. The challenge would be to be more creative, innovative and be part of more value chains,” Sapre said. Most businesses are now software-driven and they were engaged with clients to bring out positive outcomes from improving throughput, reducing wastages and enabling customers to adapt to changing consumer behaviour.

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This was reflected in the average revenue per client improving from sub million to $ 1.3 million during the quarter. The number of clients in the $ 1-5 million category had grown to 126 in FY23 from 92 in FY22.

Persistent’s BFSI revenue rose 4.74% QoQ to Rs 729.05 crore, healthcare and life science segment revenues went up by 7.21% to Rs 443.82 crore and the software vertical went up by 2.09% to Rs 1,081.59 crore.

The company’s board has recommended a final dividend of `12 per share and a special dividend of Rs 10 per share on achieving $1 billion in annual revenue, on the face value of Rs 10 each. In January 2023, they declared an interim dividend of Rs 28 per share taking the total dividend Rs 50 per share.

The Persistent stock went up by 0.61% on Tuesday to Rs 4,467.75 on the BSE.