Persistent Systems shares are charging ahead after reporting robust Q2 FY6 numbers despite macro headwinds and policy changes. Most of the brokerage houses raised their target price on the stock, looking at a potential of as much as 31% over the next 12 months. The Persistent System shares rallied 7.4% to an intra-day high of Rs 5,730 on the National Stock Exchange.
Here’s a detailed analysis on top brokerage views stated on Persistent Systems post earnings.
Motilal Oswal on Persistent Systems
Motilal Oswal retained its ‘Buy’ rating on Persistent Systems, with a target price of Rs 6,550, implying an upside of 23% from the current levels. The brokerage said that, owing to a superior earnings growth trajectory, on a PEG basis, the valuation still has room for upside. “We project a 19% US Dollar revenue CAGR over FY25-27 for the company, which, combined with margin expansion, could result in a 26% EPS CAGR. This places the company in a league of its own as a diversified product engineering and IT services player,” said the brokerage house. The brokerage is factoring in margin expansion of 100 basis points over FY26 (and another 50 bps by FY27), while FY25 and FY26 estimates remain largely unchanged.
JM Financial Services on Persistent Systems
JM Financial said that such a consistent performance “merits a premium valuation.” The brokerage maintained its ‘Buy’ rating on Persistent Systems. The brokerage raised the target price to Rs 6,140, looking at an upside of 15% from the current levels.
Rebound in Healthcare & Lifesciences, which was up 3.8% QoQ, and top-5 clients (7.8%) indicate that the company is offsetting planned offshoring in its top account and navigating regulatory challenges in this vertical well, allaying concerns. Persistent Systems’ consistent strong performance, despite unchanged macro, underlines its head-start in AI offerings, relentless execution and an eye on client diversification. This is a strong blueprint for predictable growth. “We therefore raise our FY26-28 constant currency growth 150-220 bps, though keep margin estimates largely unchanged, driving 1.5-4.5% EPS increase,” said JM Financial Services.
Nomura on Persistent Systems
Nomura raised its EBIT margin estimates by 40-50 bps for FY26-27 to 15.7-16.3%. Persistent remains confident of a 200-300 bps improvement in EBIT margin, compared to the FY25 level of 14.7% in the next two years. The brokerage raised its target price to Rs 5,200 from Rs 5,000, which is a downside of 2.6% from the current levels. However, the brokerage maintained its ‘Neutral’ rating on the stock, stating that it has a “rich valuation.” Nomura prefers Coforge (Buy) in the mid-cap India IT services space.
Nuvama Equities on Persistent Systems
Persistent Systems reported robust Q2 FY26 results. The IT company’s strong revenue growth, despite macro headwinds and tariff-led uncertainty, and continuous margin expansion are leading to industry-leading earnings growth, which should, in turn, lead to consistent outperformance by the stock. The brokerage house raised the target price on the stock to Rs 7,000 from Rs 6,600, an upside of 31%, while maintaining a ‘Buy’ rating. “We are upgrading FY26 and FY27 EPS by 3.4% and 2.4%, respectively, on slightly higher margin expectations,” said Nuvama.