Persistent Systems Reports Strong Q2 FY26 Results with 17.6% YoY Revenue Growth and Margin Expansion

Persistent Systems , a leading global technology services company, has reported robust financial results for the second quarter of fiscal year 2026, demonstrating continued growth and profitability improvements.

Financial Highlights

Revenue reached $406.2 million, marking a 17.6% year-on-year (YoY) growth and 4.2% quarter-on-quarter (QoQ) increase
EBIT margin expanded to 16.3%, showing a 230 basis points improvement YoY
Profit after tax (PAT) margin stood at 13.2%, up 45.1% YoY in absolute terms

Key Performance Metrics

Metric	Q2 FY26 Value	YoY Growth
Revenue	$406.2 million	17.6%
EBIT Margin	16.3%	230 bps
PAT Margin	13.2%	45.1%
Total Contract Value (TCV)	$609.2 million	-
Annual Contract Value (ACV)	$447.9 million	-

Business Highlights

This marks Persistent's 22nd consecutive quarter of growth, bringing trailing 12-month revenue above $1.5 billion
New bookings for the quarter stood at $350.8 million in TCV terms
The company implemented merit increments for all global employees effective October 1, 2025
Total headcount reached 26,224, up 884 from the previous quarter
Trailing 12-month attrition improved to 13.8%

Segment Performance

BFSI sector led industry growth at 30% YoY
Europe showed strong growth at 37.9% YoY, followed by North America at 15.4% YoY
Top 5 clients' revenue grew by 23.4% YoY

AI and Innovation

Persistent Systems continues to advance its AI strategy through three core pillars:

AI for Technology
AI for Business
Enterprise Data Readiness for AI

The company has been recognized for its AI initiatives, winning two CII National AI Awards 2025 and completing the audit process for ISO 42001 certification for AI management systems.

Management Commentary

Sandeep Kalra, Executive Director and CEO, commented on the results: "We are pleased with the consistent performance we have delivered despite continued macroeconomic and geopolitical uncertainties. We remain committed to strengthening our capabilities, including infusing AI across all our offerings and proactively engaging with our customers to bring the latest innovations to them."

Outlook

While not providing specific forward-looking guidance, management expressed confidence in the company's growth trajectory and its ability to reach $2 billion in revenue by the end of FY27. The focus remains on balancing growth with margin improvement, with an emphasis on AI-led transformations and proactive customer engagement.

Persistent Systems continues to demonstrate strong execution in a challenging environment, leveraging its AI capabilities and deep customer relationships to drive growth across key verticals and geographies.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+1.55%	+9.66%	+10.88%	+19.27%	+11.38%	+868.15%

Persistent Systems , a leading IT company, saw its stock surge 8% following the announcement of its September quarter results on October 14. The company reported robust growth and record-breaking performance across key metrics, signaling strong momentum in its business operations.

Financial Highlights

Metric	Q2 FY24	QoQ Change
Revenue	$406.20 million	4.2% ↑
Operating Margin	16.3%	Record high
Order Bookings	$609.20 million	Record high

Persistent Systems demonstrated impressive sequential revenue growth of 4.2% in Q2 FY24, reaching $406.20 million. This marks an improvement from the 3.9% growth recorded in the previous quarter, indicating accelerating business momentum.

Sector Performance

The healthcare vertical, which contributes over 25% of the company's revenue, showed a strong recovery with 4% sequential growth. This turnaround is particularly noteworthy, considering the 2.2% decline observed in the previous quarter.

Operational Excellence

Persistent Systems achieved a record quarterly operating margin of 16.3%. This exceptional performance was supported by:

80 basis points from software license cost reversal
60 basis points from currency benefits
20 basis points from increased offshoring

Strong Order Book

The company reported record quarterly order bookings of $609.20 million, primarily driven by renewal projects. This robust order book provides visibility for future revenue growth and underscores the company's strong market position.

Workforce Dynamics

Metric	Q2 FY24	Change
Employee Count	26,224	+884
Attrition Rate	13.8%	Stable

Persistent Systems continued to expand its workforce, adding 884 employees during the quarter. The company maintained a stable attrition rate of 13.8%, indicating effective talent retention strategies in a competitive IT job market.

Future Outlook

Persistent Systems aims to achieve $2 billion in revenue by FY27. The company expects to maintain double-digit growth for FY26, showcasing confidence in its long-term growth trajectory.

However, investors should note that salary revisions implemented from October 1 are expected to impact margins by 80-100 basis points in the coming quarters.

Analyst Perspective

Motilal Oswal maintains a positive outlook on Persistent Systems, projecting:

19% revenue growth between FY25-FY27
26% earnings growth between FY25-FY27

Based on these projections, Motilal Oswal has reiterated a 'Buy' rating for Persistent Systems with a target price of Rs 6,550.

The strong Q2 FY24 results, coupled with a positive outlook and analyst endorsement, suggest that Persistent Systems is well-positioned for continued growth in the competitive IT services landscape.