Shares of Persistent Systems have risen 13.49% in three sessions after strong Q3 results.

Last week, the IT company reported 8.2% rise in net profit to Rs 237.95 crore on a 5.9% increase in revenue to Rs 2,169.37 crore in Q3 FY23 over Q2 FY23. Gross profit during the period under review was Rs 733.36 crore, up 6.9% QoQ. While EBITDA rose by 9.1% QoQ to Rs 401.56 crore, EBITDA margin improved by 50 bps QoQ to 18.5% in Q3 FY23.

As compared with Q3 FY22, the company's net profit and revenue are higher by 34.9% and 45.4%, respectively.

In dollar terms, the company's revenue in Q3 FY23 was $264.35 million. Services revenue was $242.65 million (up 3% QoQ) and IP Led revenue was $21.70 million (up 8.6% QoQ).

The order booking for the quarter ended on 31 December 2022, was at $440.2 million in total contract value (TCV) and at $326.3 million in annual contract value (ACV) terms.

The board declared an interim dividend of Rs 28 per share on the face value of Rs 10 each for the financial year 2022-2023.

In a note released on 13 January 2023, a foreign brokerage firm picked Persistent Systems as its top midcap IT stock, with a target price of Rs 8,330. We see broad-based growth drivers that have helped deliver superior growth despite a drag from top five clients, it said.

Persistent Systems is a global services and solutions company delivering digital engineering and enterprise modernization.

The stock outperformed the market over the past one month, rising 17% compared with 1.73% increase in the Sensex.

The scrip outperformed the market in past one quarter, surging 22.5% as against Sensex's 2.66% rise.

The scrip outperformed the market in past one year, climbing 4.29% as against Sensex's 3.13% rise.

On the technical front, the stock's daily RSI (relative strength index) stood at 73.72. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.

On the daily chart, the stock was trading above its 50-day, 100-day and 200-day simple moving average (SMA) placed at 3986.98, 3733.67 and 3710.64, respectively. These levels will act as crucial support zones in near term.

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Persistent Systems Ltd is up for a third straight session today. The stock is quoting at Rs 4511, up 4.34% on the day as on 12:49 IST on the NSE. The benchmark NIFTY is up around 0.41% on the day, quoting at 18101.8. The Sensex is at 60898.32, up 0.46%. Persistent Systems Ltd has gained around 18.38% in last one month.

Meanwhile, Nifty FMCG index of which Persistent Systems Ltd is a constituent, has gained around 5.08% in last one month and is currently quoting at 29529.65, up 1.01% on the day. The volume in the stock stood at 5.83 lakh shares today, compared to the daily average of 3.98 lakh shares in last one month.

The benchmark January futures contract for the stock is quoting at Rs 4476.75, up 4.98% on the day. Persistent Systems Ltd is up 10.94% in last one year as compared to a 5.56% jump in NIFTY and a 14.34% jump in the Nifty FMCG index.

The PE of the stock is 44.08 based on TTM earnings ending December 22.

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Gross profit during the period under review was Rs 733.36 crore, up 6.9% QoQ.While EBITDA rose by 9.1% QoQ to Rs 401.56 crore, EBITDA margin improved by 50 bps QoQ to 18.5% in Q3 FY23.

Profit before tax in the third quarter stood at Rs 322.79 crore, up by 9.2% from Rs 295.60 crore in Q2 FY23.

As compared with Q3 FY22, the company's net profit and revenue are higher by 34.9% and 45.4%, respectively.

In dollar terms, the company's revenue in Q3 FY23 was $264.35 million. Services revenue was $242.65 million (up 3% QoQ) and IP Led revenue was $21.70 million (up 8.6% QoQ).

The order booking for the quarter ended on 31 December 2022, was at $440.2 million in total contract value (TCV) and at $326.3 million in annual contract value (ACV) terms.

Total headcount was 22,598, up 33% YoY. Attrition rate on TTM basis was 21.6% in Q3 FY23 as against 23.7% in Q2 FY23 and 24.8% in Q1 FY23.

The board of directors declared an interim dividend of Rs 28 per share on the face value of Rs 10 each for the financial year 2022-2023.

Sandeep Kalra, chief executive officer and executive director, Persistent, said: “We are delighted to announce the 11th sequential quarter of revenue growth, fueled by our continued investments in innovative technologies and our differentiated Digital Engineering expertise.

In this dynamic macro-economic environment, we are closely collaborating with our clients and partner ecosystem to create competitive advantage and drive business value. As a result, we won several large deals across industries and service lines, driving 20% sequential growth in total contract value (TCV) bookings.”

Persistent Systems is a global services and solutions company delivering digital engineering and enterprise modernization.

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Persistent Systems has fixed 27 January 2023 as record date for interim dividend of Rs 28 per equity share of Rs 10 each for FY 2023.

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