Persistent Systems delivered another quarter of steady growth in Q3 FY26, driven by sustained demand for data, cloud and digital engineering services across key client segments. The IT services company reported profit after tax of ₹439 crore, reflecting an 18% year-on-year increase despite a 7% sequential decline attributed to labour code impact.

Financial Performance Overview

The company's financial metrics for Q3 FY26 demonstrated resilience amid a mixed global technology spending environment:

In constant currency terms, revenue grew 17.3% year-on-year and 4.1% quarter-on-quarter, demonstrating stable execution capabilities. The company noted that one-time labour code impact reduced EBIT by approximately 2.3% and PAT by about 1.8% during the quarter.

Operating Margins and Profitability

Operating performance remained healthy despite sequential moderation. Earnings before interest and tax (EBIT), excluding one-time impacts, reached ₹632 crore with a margin of 16.7%. This represented an 8.2% sequential increase and a substantial 38.6% jump year-on-year.

Dividend Declaration

The board of directors declared an interim dividend of ₹22 per share on equity shares of face value ₹5 each for financial year 2025-26, reflecting confidence in the company's financial position and growth prospects.

Management Commentary

Sandeep Kalra, CEO and Executive Director of Persistent Systems, highlighted that the company delivered its 23rd consecutive quarter of revenue growth. He attributed this performance to deeper engagement in strategic client programmes and sustained demand across core industries. Key growth drivers include:

• Data, cloud and digital engineering services
• Larger and more complex technology engagements
• Focus on operational efficiency and innovation
• Implementation of agentic artificial intelligence within operations

Strategic Outlook

Persistent Systems emphasized its priority of sustaining growth through consistent execution as enterprise demand continues shifting toward long-term, high-value digital transformation programmes. The company's focus on innovation, including AI adoption at scale, positions it well for capturing emerging opportunities in the evolving technology landscape.

Persistent Systems has announced a significant corporate restructuring move involving its European operations. The company's Board of Directors has approved the transfer of its German and French subsidiaries to its Ireland-based group entity as part of operational efficiency initiatives.

Board Approval and Transaction Details

At a board meeting held on January 20, 2026, Persistent Systems Limited's directors approved the transfer of 100% shareholding in two key European subsidiaries. The transaction involves moving ownership of both Persistent Systems Germany GmbH and Persistent Systems France S.A.S. to Aepona Group Limited, Ireland.

Strategic Rationale and Impact

The restructuring initiative aims to achieve entity rationalization and operational efficiency within the group structure. The transfer will be executed upon completion of a Share Purchase Agreement that will be finalized in due course.

Following the completion of this transaction, both European entities will transition from being direct subsidiaries of the Indian parent company to becoming wholly owned subsidiaries of Aepona Group Limited in Ireland.

Shareholding Pattern Changes

The restructuring will result in a complete change in the ownership structure of the European operations:

Regulatory Compliance and Disclosure

The company has made this disclosure in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The announcement also references SEBI circulars dated July 13, 2023, and November 11, 2024, ensuring full regulatory compliance.

The company has clarified that no specific benefits have been identified for promoters, promoter groups, or other group companies from this proposed restructuring. The transaction appears to be focused purely on operational optimization and corporate structure efficiency within the existing group framework.