Persistent Systems , a global digital engineering leader, has reported robust financial results for the second quarter, while also announcing an ambitious revenue target for the future and addressing upcoming wage-related challenges.

Q2 Financial Highlights

Persistent Systems demonstrated strong performance in Q2, with key financial metrics showing significant year-over-year growth:

• Revenue reached $406.20 million, up 17.6% year-over-year
• EBIT (Earnings Before Interest and Taxes) stood at ₹5,837.40 million, with a margin of 16.3%
• Profit After Tax (PAT) was ₹4,714.70 million, with a margin of 13.2%

The company's performance marks its 22nd consecutive quarter of revenue growth, reflecting consistent execution and strong market demand for its services.

Ambitious FY27 Revenue Target

Persistent Systems has set a goal to achieve $2 billion in revenue by FY27. This target represents substantial growth from its current run rate and underscores the company's confidence in its business model and market opportunities.

To support this growth trajectory, Persistent has outlined a two-step margin improvement plan:

1. A 100 basis point margin improvement targeted for FY26
2. An additional 100 basis point margin enhancement planned for FY27

These margin expansion goals indicate the company's focus on not just top-line growth but also on improving profitability as it scales.

Q3 Wage Increase Impact and Mitigation Strategies

Persistent Systems expects wage increases to impact margins by 180 basis points in Q3. However, the company has proactively planned to offset this impact by 80-100 basis points through operational strategies. These strategies include:

1. Increased offshoring of operations
2. Improved utilization rates

These measures demonstrate the company's agility in managing costs while maintaining its growth trajectory.

Strategic Focus and Market Position

Sandeep Kalra, Chief Executive Officer and Executive Director of Persistent Systems, commented on the results: "Our AI strategy builds on a strong platform-led foundation and is powered by deep domain knowledge, differentiated IPs, accelerators and strategic partnerships. This integrated approach brings together enterprise readiness for AI transformation, engineering hyper-productivity and business hyper-productivity, enabling clients to scale innovation, modernize their core and achieve measurable impact faster."

The company's strategy appears to be centered on leveraging artificial intelligence to drive digital transformation for its clients, positioning Persistent as a key player in the evolving technology landscape.

Industry Recognition

Persistent's strong performance and strategic direction have been recognized by industry analysts:

• Received the 'Growth Honor of the Year' at Everest Group Elevate 2025
• Named a Leader in the Everest Group Talent Readiness for Next-generation Cloud Services PEAK Matrix® Assessment 2025

These accolades underscore Persistent's growing reputation in the industry and its ability to deliver value to clients.

Looking Ahead

As Persistent Systems aims for its $2 billion revenue target, the company will likely focus on:

1. Expanding its AI-driven services and solutions
2. Strengthening strategic partnerships
3. Enhancing its talent pool to support growth
4. Continuing to improve operational efficiency to achieve margin targets
5. Implementing strategies to mitigate the impact of wage increases

The ambitious revenue goal, margin improvement plans, and proactive approach to managing wage-related challenges signal a period of potential accelerated growth for Persistent Systems, as it seeks to capitalize on the increasing demand for digital transformation and AI-powered solutions across industries.

Persistent Systems , a leading global technology services company, has reported impressive financial results for the second quarter of fiscal year 2026, exceeding analyst estimates across key metrics and triggering bullish responses from multiple brokerages.

Financial Highlights

Persistent Systems has demonstrated robust growth across all key financial indicators, showcasing the company's strong market position and operational efficiency.

Revenue and Profitability

The company's revenue from operations for Q2 FY2026 stood at ₹3,580.70 crore, representing a 23.5% increase year-over-year. This growth surpassed the estimated ₹3,521.00 crore, indicating strong demand for Persistent's services and solutions.

Consolidated net profit saw a significant jump to ₹471.50 crore, up 45% year-over-year. This performance exceeded analyst expectations of ₹436.00 crore, highlighting the company's ability to improve profitability alongside revenue growth.

Operational Efficiency

Persistent Systems' EBIT (Earnings Before Interest and Taxes) rose to ₹583.00 crore from ₹519.00 crore in the previous quarter, marking a 12.33% increase. This result was notably higher than the estimated ₹552.00 crore, demonstrating the company's improved operational efficiency.

The EBIT margin improved to 16.28% from 15.57% in the previous quarter, surpassing the estimated 15.70%. This 71 basis point improvement in margin reflects the company's ability to manage costs effectively while driving growth.

Corporate Actions and Market Response

The company's board approved the transfer of 100% shareholding of Aepona Group Ltd, Ireland, indicating potential strategic moves in the near future.

Following the strong results, multiple brokerages responded positively:

• CLSA raised its target price to ₹8,270 with an outperform rating
• Nuvama increased its target to ₹7,000 with a buy rating
• Motilal Oswal maintained a buy rating with a target of ₹6,550, projecting a 19% USD revenue CAGR over FY25-27

HDFC Securities noted broad-based growth with strong performance in the BFSI vertical and European market. They also highlighted the company's AI-led platform strategy, with 20 new patents filed for its SASVA platform.

Stock Performance

In response to the strong results and positive brokerage calls, Persistent Systems' stock surged over 7% to an intraday high of ₹5,728.90. At the time of reporting, the stock was trading at ₹5,692.70, up 6.91% from the previous close of ₹5,324.25.

Conclusion

Persistent Systems' Q2 FY2026 results demonstrate the company's strong market position and operational excellence. By exceeding analyst estimates across key metrics, Persistent has reinforced investor confidence in its growth strategy and execution capabilities. The significant improvements in revenue, profitability, and operational efficiency, coupled with positive brokerage responses and stock performance, position the company well for continued success in the dynamic global technology services market.