Persistent Systems reported a consolidated net profit of ₹4,830.4 million for the quarter ended June 30, 2026, driven by a 29.1% year-on-year surge in revenue to ₹43,032.3 million (US$452.4 million). The Board of Directors approved these audited results on August 2, 2026, alongside the proposed acquisition of up to 100% of Nagarro SE at EUR 81 per share. This strategic move aims to strengthen the company’s European footprint and diversify its global IT services platform, signaling aggressive expansion despite a complex regulatory landscape requiring shareholder and Reserve Bank of India approvals.

The financial performance was validated by statutory auditors B S R & Co. LLP, who issued an unmodified opinion on both standalone and consolidated statements. Pursuant to Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company published newspaper advertisements in Financial Express and Loksatta on August 3, 2026. The results were prepared in accordance with Indian Accounting Standards (Ind AS) and the Companies Act, 2013.

Financial Performance

Consolidated total income reached ₹43,738.63 million, up from ₹33,882.49 million in Q1FY26. Earnings before interest and taxes (EBIT) grew 32.7% year-on-year to ₹6,868.8 million, outpacing revenue growth and reflecting operational leverage. Profit before tax stood at ₹6,231.0 million against a tax expense of ₹1,400.58 million. Basic earnings per share (EPS) were ₹30.88, compared to ₹27.43 in the prior year.

Standalone revenue from operations increased 26.4% YoY to ₹41,178.01 million, with a net profit of ₹4,020.24 million. Standalone basic EPS rose to ₹25.70 from ₹23.71 in Q1FY26.

Strategic Developments: Nagarro Acquisition

The Board approved the acquisition of Nagarro SE through its subsidiary Galaxy Germany Holding SE ('BidCo') at EUR 81 per share. A Share Purchase Agreement was signed with Lantano Beteiligungen GmbH to initially acquire a 21% shareholding. To secure bridge financing of EUR 1,400 million from Barclays Bank PLC, the Board approved a corporate guarantee of up to EUR 1,540 million, supported by pledges on BidCo’s shareholding and inter-company receivables. This transaction is subject to approval at the 36th Annual General Meeting and requisite regulatory clearances, including RBI approval.

Additionally, Persistent Systems Ireland Operations Limited established a new subsidiary in Estonia via acquisition on May 22, 2026. A Business Purchase Agreement with Concise Systems OÜ was executed on May 28, 2026, with closing conditions met on July 1, 2026; this had no accounting impact in Q1FY27. The merger of MediaAgility India Private Limited into the holding company remains pending necessary approvals.

Operational Highlights

The company achieved a record quarterly Total Contract Value (TCV) of US$1.15 billion, highlighted by a 6.5-year strategic services agreement with a leading global technology company valued at more than US$650 million. Trailing twelve-month (TTM) TCV stood at US$3,030.7 million, while TTM Annual Contract Value (ACV) was US$1,931.7 million.

Employee headcount increased to 28,640 as of June 30, 2026, from 27,502 in the previous quarter. The technical workforce comprised 26,905 employees. Utilization rate was 86.5%, including trainees, while the trailing twelve-month attrition rate declined to 12.3% from 13.0% in the prior quarter. Days Sales Outstanding (DSO) for billed receivables was 61 days.

What the Numbers Show

EBIT growth of 32.7% significantly outpaced net profit growth of 13.7%, indicating strong operational leverage despite higher employee benefits expense. While top-line expansion is robust, the disproportionate rise in operational costs suggests that cost management remains a key focus area as the company scales. However, the maintenance of a 16.0% EBIT margin amidst aggressive hiring (headcount up 4.1% QoQ) demonstrates disciplined execution in managing leverage during high-growth phases.

Persistent Systems has submitted the newspaper advertisement for its 36th Annual General Meeting (AGM) to the stock exchanges, confirming the publication of the notice on July 11, 2026. The advertisement, titled 'Notice of the 36th Annual General Meeting, Book Closure and Remote E-Voting Information', was published in the Financial Express (English, All editions) and Loksatta (Marathi, Pune edition). This disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AGM Agenda

The AGM is scheduled to seek shareholder approval for the acquisition of Nagarro SE. Persistent Systems proposes to acquire 100% of the German-listed entity for an enterprise value of €1.27 billion through its wholly owned subsidiary, Galaxy Germany Holding SE. The transaction includes a voluntary public takeover offer at €81.00 per share and is expected to close in Q4 of Calendar Year 2026 or early Q1 of Calendar Year 2027, subject to regulatory approvals.

Financials and Dividends

Shareholders will vote on the adoption of audited financial statements for FY 2025-26. The company has also proposed an interim dividend of ₹22 per share and a final dividend of ₹18 per share, aggregating to ₹40 per share. The record date for determining eligibility for the final dividend is July 27, 2026.

Transaction and Financing

The acquisition will be funded through a committed bridge financing facility of €1.4 billion from Barclays, with an interest rate ranging from 4.1% to 4.8%. The company seeks approval to provide a corporate guarantee of up to €1.54 billion and create charges on assets to secure the facility. The leverage ratio is projected to be between 1.9x and 2.5x net debt to combined EBITDA, reducing to 1x by FY2030.

Strategic Rationale

The combined entity is expected to generate a revenue run-rate of approximately $2.9 billion and employ over 46,000 professionals across 40+ countries. Management emphasized that the deal is anticipated to be cash EPS accretive in the first year, excluding transaction expenses. The strategic move aims to expand Persistent Systems' footprint in Europe and diversify its verticals, leveraging Nagarro's strengths in ERP and customer experience.