HSBC keeps ‘Hold’ on Persistent Systems, flags margin pressure after Q1 and sets ₹4,610 target
AI Market Summary
HSBC reiterated a "Hold" on Persistent Systems after Q1 results showed above-expected constant-currency revenue growth and record bookings, but profitability softened. EBIT margin fell to 16% due to higher direct costs and increased sales and marketing spend, while net profit declined sequentially on a sizable FX loss. The setup implies near-term stock sensitivity to margin trajectory and execution risk despite solid demand indicators.
Impact level
● Low
Affected assets
NCCOGOLD2USD/USDT-0.67%
AI Insight · NCCOGOLD2USD/USDTAI Insight
● Neutral
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HSBC maintained its ‘Hold’ rating on Persistent Systems after the company reported fiscal 2025 first-quarter results, keeping its target price at ₹4,610. Constant-currency revenue rose 4.1% quarter-on-quarter, beating HSBC’s expectations. EBIT margin slipped to 16% versus an expected 16.5% as direct costs and sales and marketing expenses increased. EBITDA and EBIT grew 4.5% and 4.2% year-on-year, respectively.
