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.

Persistent Systems has reported robust financial results for the second quarter, alongside ambitious growth targets driven by its AI strategy and expanding client base.

Financial Highlights

• Revenue: ₹35,807.20 crore ($406.20 million), up 17.6% year-over-year
• EBIT: ₹5,837.40 crore, with a margin of 16.3%
• Profit After Tax (PAT): ₹4,714.70 crore, representing a 45.1% year-over-year increase

Key Performance Indicators

Growth Strategy and AI Focus

Persistent Systems has outlined an ambitious growth strategy, targeting a 17% revenue compound annual growth rate (CAGR). This strategy is underpinned by:

1. AI-driven initiatives
2. Expansion of client base
3. Maintenance of a 16% EBIT margin
4. Projected 45% increase in profit after tax

The company's focus on AI-led, platform-driven services is expected to be a key driver of this growth. Persistent is leveraging its SASVA platform for AI infrastructure and iAURA for process and document intelligence across various industries.

Segment Performance

• Banking, Financial Services and Insurance (BFSI): ₹12,455.60 crore
• Healthcare & Life Sciences: ₹9,027.32 crore
• Software, Hi-Tech and Emerging Industries: ₹14,324.28 crore

Client Acquisition and Expansion

Persistent Systems reported significant wins across various sectors:

• Collaboration with a global infrastructure provider to scale AI infrastructure platforms
• Development of R&D for endpoint security products for a global cybersecurity leader
• Transformation of tax and accounting software for a global fintech platform
• Leveraging GenAI to improve customer experience for a leading wealth management company

Management Commentary

Sandeep Kalra, CEO and Executive Director of Persistent Systems, stated, "We are pleased to report our 22nd sequential quarter of revenue growth, up 4.2% Q-o-Q and 17.6% Y-o-Y, with operating margin improving to 16.3%. Our AI strategy builds on a strong platform-led foundation and is powered by deep domain knowledge, differentiated IPs, accelerators and strategic partnerships."

Industry Recognition

The company's performance has been recognized by several industry accolades:

• 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
• Won multiple ISG Customer Experience (CX) Star Performer Awards

Conclusion

Persistent Systems' strong Q2 results and ambitious growth targets reflect its strategic focus on AI-driven solutions and expanding client relationships. The company's ability to maintain high growth rates while improving profitability positions it well in the competitive IT services landscape.

As Persistent Systems continues to invest in AI capabilities and expand its service offerings, it appears well-positioned to capitalize on the growing demand for digital transformation and AI-powered solutions across various industries.