Debasis Mohapatra
Bengaluru, 30 October 2024
Persistent Systems is likely to see growth picking up in its Software, Hi-tech & Emerging Industries vertical in coming quarters, leading to further acceleration of its revenue growth.
According to the company, growth slide in the tech vertical has bottomed out and an uptick is on the horizon.
“As far as the tech vertical is concerned, we do think it is bottoming out. Based on the pipeline, based on the deal wins, we do think coming in the next one to two quarters, (because some of these programs will take time to ramp up… these are complex programs which we have won based on the platform-driven approach that we have taken,) we are relatively confident all of our verticals will kick in,” Sandeep Kalra, CEO of Persistent Systems has said during the analyst call after announcing its Q2FY25 earnings.
“All of the verticals will have secular growth, including the tech vertical….overall, as a company, we are confident all three will kick in. All three will be growth enablers. And we are fairly confident of expanding the margins over the next two to three years based on…..our approach of using platform, driving higher revenue, higher profitability per employee,” Kalra has said.
Software, hi-tech and emerging industries is the largest vertical of Persistent, which contributed $140.5 million in the second quarter of FY25. BFSI is the second largest vertical with $108.8 billion revenue contribution, while healthcare & life sciences contributed around $96.2 million during Q2 of current financial year.
According to the company, it is more focussed on being a platform-driven IT firm that provides differentiated offerings to clients. This will help the company to drive margin and improve its revenue per employee.
“As far as the scaling is concerned,…if you look at it in the last several quarters, we have been saying that we want to be a platform-driven services company. So, we are using AI to develop platforms. So our endeavor is, as we become a platform-driven services company, our revenue per employee goes up because we bring something which is very differentiated,” Kalra has said.
According to the company, it has delivered industry-leading growth in the last four years with 24% CAGR (in revenue).
Persistent System’s share price has seen increased investor interest post Q2 earnings. In the last five trading sessions, it has moved up 3.85% to Rs 5,669.65 in NSE on Tuesday.
