Shares of Persistent Systems were under pressure in early trade on Wednesday despite the company reporting an 18 percent year-on-year increase in net profit for the third quarter. Market participants attributed the decline to profit-booking following the stock’s sharp rally in recent months, rather than to any change in fundamentals.
During the session, Persistent Systems shares fell as much as 4.62 percent to an intraday low of ₹6,050. At 12:07 pm, the stock was trading at ₹6,085, down 4.07 percent. The BSE Sensex was also lower by 0.38 percent at around 81,869 at the same time, indicating broader market pressure.
Analysts and brokerage houses said the medium- to long-term outlook for Persistent Systems remains intact. They cited the company’s business model, client base and deal pipeline as key factors supporting expectations over a longer horizon, while describing the recent decline as a result of profit-taking after a b run-up.
Motilal Oswal has maintained its ‘Buy’ rating on Persistent Systems with a target price of ₹8,500. The brokerage said the December quarter was largely in line with normal business trends, but noted that margins were better than expected. It added that it remains uncertain whether the margin level can be sustained over the long term, but said its confidence is supported by the company’s operational performance and growth visibility.
Motilal Oswal has valued the stock at 45 times its estimated earnings for FY2028, citing consistent execution, a b order book and rising demand related to digital transformation.
Nomura has retained its ‘Neutral’ rating on the stock, stating that valuations remain high at current levels. However, the brokerage has raised its earnings estimates for FY2027 and FY2028 by around 2 percent and increased its target price to ₹6,100. Nomura said the stock is trading at about 41.5 times its FY2027 earnings.
PL Capital and MK Global have also maintained a positive stance on the company, citing expectations of growth, improvement in margins and a healthy deal flow. PL Capital has set a target price of ₹7,360, while MK Global has retained an ‘Add’ rating with a target of ₹6,700. The difference in targets reflects varying valuation approaches rather than concerns over fundamentals.
Persistent Systems reported a net profit of ₹439.4 crore in the third quarter of FY2026, up 17.8 percent year-on-year, while profit declined 6.8 percent sequentially due to additional costs linked to new labour laws. Revenue for the quarter rose 23.4 percent year-on-year to ₹3,778.2 crore and increased 5.5 percent quarter-on-quarter.
In terms of deals, the company reported new contract wins worth $369 million during the quarter, up 5 percent sequentially. Including renewals and new deals, total contract value stood at $674.5 million, reflecting a 10.7 percent increase.
