Persistent Systems' Q1 net profit falls 8.7 pc sequentially to Rs 483 crore
Mumbai, Aug 2
IT major Persistent Systems Limited on Sunday reported an 8.7 per cent quarter-on-quarter decline in its consolidated net profit for the first quarter of the financial year 2027.
According to the company's exchange filing, consolidated net profit stood at Rs 483 crore during the April-June quarter, compared with Rs 529 crore in the preceding quarter (Q4 FY26).
Revenue from operations rose 6.1 per cent sequentially to Rs 4,303 crore from Rs 4,056 crore in the January-March quarter, the IT major added in its filing.
However, profitability weakened during the quarter. Earnings before interest and taxes (EBIT) declined nearly 11.8 per cent to Rs 582 crore from Rs 659 crore in the previous quarter.
The company's EBIT margin also contracted by 280 basis points to 13.5 per cent in the first quarter, compared with 16.3 per cent in the preceding quarter.
Commenting on financial performance, Sandeep Kalra, Chief Executive Officer and Executive Director, Persistent said that the performance was underpinned by a record quarterly total contract value (TCV) of $1.15 billion, reflecting continued momentum in larger client engagements, including a 6.5-year strategic services agreement with a leading global technology company with a TCV of more than $650 million.
"We signed a business combination agreement with Nagarro, a leading European digital engineering company listed on the Frankfurt Stock Exchange. This transaction is in line with the M&A strategy we have consistently outlined to strengthen our capabilities and expand our geographic footprint and industry coverage," he stated.
"We continue to invest in this capability through our 3C framework, AI-driven platforms, helping clients build more Intelligent Enterprises, reshape their operating models and realize greater value from AI. We thank our clients, partners, employees and shareholders for their continued trust and support as we continue to strengthen Persistent for the opportunities ahead," Kalra mentioned.
— IANS
Reader Comments
The $1.15 billion TCV is impressive, especially that $650 million deal with a global tech giant. But margins contracting to 13.5% is concerning. AI investments are necessary, but they need to balance costs better.
As someone working in IT, these quarterly fluctuations are normal. The Nagarro acquisition is a big move - European presence will help them compete with bigger players. Patience is key with these strategic bets.
EBIT margin down 280 bps is a big drop. But the CEO's focus on AI-driven platforms shows they're thinking long-term. Indian IT companies need to innovate to stay relevant in this AI era. Hope the investment pays off! 💪
This is what happens when you chase growth through acquisitions. Salary costs and integration expenses eat into profits. Persistent should focus on organic growth and improving operational efficiency rather than just buying companies.
Record TCV of $1.15 billion shows strong deal pipeline. The 6.5-year contract is a testament to client trust. Short-term profit dip is just part of the cycle - revenue growth of 6% quarter-on-quarter is solid.
Another Indian IT company facing margin pressure
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