Persistent Systems Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Persistent Systems Ltd trades at ₹5,184, in a downtrend and 19 weeks into that stage. That is −1.6% against its own 200-day average. It sits at 39% of a 52-week range of ₹4,330 to ₹6,521. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 2 straight weeks.

Today the stock is in a downtrend — week 19 of stage 4, confirmed. At ₹5,184 it trades −1.6% versus its 200-day average and sits at 39% of its 52-week range (₹4,330–₹6,521).

Against the market, two honest reads. Cumulative: over the last 10.3 years the stock moved +1,630% while the NIFTY 500 moved +274% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 2 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

→ The trend is one thing; the bill is another. Are you paying up for it? Next: the P/E sits at the 67th percentile of its own range.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Persistent Systems Ltd trades at 42.6× P/E, mid-range by its own standards (67th percentile). Its long-run median P/E is 35.4×, measured across 10.4 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 42.6× is mid-range by its own standards (67th percentile), against a long-run median of 35.4× measured over 10.4 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +30.6% against a −6.6% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +29.5%/yr price move, ~+29.6%/yr came from earnings growth and ~−0.1 pp from the multiple (roughly flat); over 10y, of the +31.8%/yr price move, ~+20.8%/yr came from earnings growth and ~+11.0 pp from the multiple (expanding). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is full against its own past, so the story rests on the earnings line underneath it, not the multiple.

→ Cheap or dear rides on the earnings. Are they actually growing? Next: the fundamental stage — where the business sits in its arc, and how growth has compounded.

Stage: Consistent Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Persistent Systems Ltd reads as consistent on its fundamental arc. Consistent — revenue, profit and EPS growth have stayed positive through the window, with ROCE at 33.0% and holding. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: steady curves with healthy returns are the compounding setup — the risk is the price, not the business.

→ The stage names the trajectory. Next: the revenue line that produces it, quarter by quarter.

4-Factor Sector Score

74.4/100 — rank 1 of 7 in IT - ER&D · 90% evidence confidence

Persistent Systems Ltd scores 74.4 out of 100 against the 7 companies it is compared with in IT - ER&D, ranking 1. Confirmed research leader: earnings, capital efficiency and relative strength agree. Move to management, catalyst and risk diligence.

The four contributions add to the total exactly: 29.2 + 20.4 + 10.6 + 14.2 = 74.4. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Persistent Systems Ltd reported ₹4,056 Cr of revenue in the Mar 26 quarter, +25.1% year on year. That is the 12th straight quarter of year-on-year growth. Over 10 years it has compounded at 20.4% a year. The last full year, FY26, came in at ₹14,748 Cr. The last four reported quarters add to ₹14,749 Cr.

Persistent Systems Ltd reported ₹4,056 Cr of revenue in the Mar 26 quarter, +25.1% year on year. That is the 12th straight quarter of year-on-year growth. Over 10 years it has compounded at 20.4% a year. The last full year, FY26, came in at ₹14,748 Cr. The last four reported quarters add to ₹14,749 Cr.

FY26 revenue came in at ₹14,748 Cr (+23.5% on the year), capping 10 years at 20.4% compound. The latest quarter (Mar 26) printed ₹4,056 Cr, +25.1% year on year — the 12th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +23.5% growth against the decade's 20.4% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +23.5% over the last 4 quarters against +22.5%/yr over the last 8 — stabilising; TTM profit +33.1% vs +30.6%/yr — stabilising.

→ Revenue grew — did margins hold as it scaled? Next: 19.0% this quarter (+1.0 pp YoY).

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Persistent Systems Ltd's operating margin is 19.0% in the Mar 26 quarter, +1.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 14.0% to 25.0%. The current quarter sits inside that band.

Persistent Systems Ltd's operating margin is 19.0% in the Mar 26 quarter, +1.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 14.0% to 25.0%. The current quarter sits inside that band.

The latest quarter's operating margin is 19.0%, +1.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 14.0%–25.0%.

Why the margin moved: operating margin went +0.9 pp year on year while gross margin went +0.0 pp — the gain came mostly below the gross line: operating leverage, with costs spread over a bigger revenue base.

→ Margins held — did that reach the bottom line? Next: profit +33.6% in the latest quarter.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Persistent Systems Ltd earned ₹529 Cr of net profit in the Mar 26 quarter, +33.6% year on year. It is the 12th consecutive quarter of growth. Full-year FY26 profit was ₹1,865 Cr. The 10-year compound rate is 21.0%. That is 13.0% of the quarter's revenue. The same quarter a year earlier earned ₹396 Cr.

Persistent Systems Ltd earned ₹529 Cr of net profit in the Mar 26 quarter, +33.6% year on year. It is the 12th consecutive quarter of growth. Full-year FY26 profit was ₹1,865 Cr. The 10-year compound rate is 21.0%. That is 13.0% of the quarter's revenue. The same quarter a year earlier earned ₹396 Cr.

Mar 26 profit was ₹529 Cr, +33.6% year on year — the 12th consecutive quarter of growth. On the full year, FY26 printed ₹1,865 Cr (+33.2%), and the 10-year compound rate is 21.0%.

Why profit moved: revenue contributed +25.1% and the margin +1.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +33.8% vs revenue +23.5%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

→ Profit rose — but did the cash follow? Next: 97% of the last 3 years' profit arrived as cash.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 97% of Persistent Systems Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹1,767 Cr of operating cash against ₹1,865 Cr of profit. After ₹679 Cr of capital spending, ₹1,088 Cr was left as free cash.

FY26: operating cash of ₹1,767 Cr against reported profit of ₹1,865 Cr, leaving free cash of ₹1,088 Cr after ₹679 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 97% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 97%: the cash cycle stretched 33 days between FY21 and FY26 — more of each rupee of profit waits inside the cycle before arriving.

Router verdict: the bigger cash user is investment — capital spending ran 1.5× depreciation over three years, so the next section's job is to check what that build-out is buying.

→ So follow the cash to where it goes. Next: ₹1,556 Cr of building over 3 years.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Persistent Systems Ltd's cash conversion cycle runs 83 days in FY26, up from 50 days in FY21. Capital spending ran ₹1,556 Cr over the last 3 years. At FY26 sales of ₹14,748 Cr each day of that cycle holds about ₹40.4 Cr, so roughly ₹3,354 Cr sits inside the business at any moment.

FY26: debtors at 83 days (an asset-light business — no inventory to speak of) — for a full cycle of 83 days, looser than FY21's 50.

In money terms: at FY26 sales of ₹14,748 Cr, each day of the cycle holds about ₹40.4 Cr — so the 83-day loop keeps roughly ₹3,354 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹1,556 Cr over the last 3 fiscal years against ₹1,019 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹38.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

→ Does all this activity actually earn its cost of capital? Next: ROCE is 34% and the ROIC − WACC spread is +18.2 pp.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Persistent Systems Ltd earns a ROCE of 34% in FY26. That is up from a trough of 18% in FY20. Return on invested capital clears the cost of that capital by +18.2 percentage points, so growth here adds value rather than only size. The wiring behind it is 12.6% net margin on 1.30× asset turns.

FY26 ROCE is 34%, recovered from a FY20 trough of 18% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 12.6% net margin × 1.30× asset turns × 1.45× balance-sheet leverage ≈ 23.8% on equity. Margin does its share; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 30.2% − 12.0% = a +18.2 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. A spread this wide means every rupee reinvested creates more than a rupee of value — the engine compounds.

→ Returns like these — is the balance sheet borrowing to make them? Next: debt-to-equity is 0.06.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Persistent Systems Ltd carries total debt of ₹477 Cr against shareholder equity of ₹7,838 Cr as of Mar 26, a debt-to-equity of 0.06 — effectively unlevered. On the annual view that ratio went from 0.17 in FY22 to 0.06 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹477 Cr against shareholder equity of ₹7,838 Cr — a debt-to-equity of 0.06. On the annual view, debt-to-equity went from 0.17 (FY22) to 0.06 (FY26). The returns on this page are earned, not borrowed.

→ Who owns this, and are they adding or leaving? Next: Domestic institutions added 2.0 points over 8 quarters.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Domestic institutions added 2.0 points of Persistent Systems Ltd over 8 quarters, the biggest move on the register. That takes domestic institutions to 30.3% of the company. Foreign institutions moved −1.8 points over the same window, to 20.8%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Domestic institutions: +2.0 points over 8 quarters to 30.3%; Foreign institutions: −1.8 points over 8 quarters to 20.8%; Promoters: −0.7 points over 8 quarters to 30.3%.

Why the register moved: rotation — foreign institutions −1.8 points against domestic institutions +2.0 points over 8 quarters, with promoters −0.7 points — one class of institutions handing the register to the other, not a verdict change by the people closest to the numbers.

→ One last check: does the safety math agree? Next: the balance-sheet safety line.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Persistent Systems Ltd: the Z-score reads 17.51. A Z-score above roughly 3 reads as safe and below roughly 1.8 as the distress zone, so this sits well clear of distress. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure.

Why it matters: a Z-score of 17.51 sits well clear of the distress zone — the balance sheet is not the risk here.

The safety line in one sentence: the Z-score reads 17.51.

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