Persistent Systems has received a positive assessment from Prabhudas Lilladher, with the brokerage maintaining its BUY rating and setting a target price of ₹7,360. The recommendation comes on the back of strong quarterly performance that exceeded analyst expectations across multiple parameters.

Strong Revenue Performance Drives Optimism

The company delivered impressive revenue growth of 4.1% quarter-on-quarter in constant currency terms, surpassing Prabhudas Lilladher's estimate of 3.2%. This outperformance was supported by broad-based growth across various verticals, demonstrating the company's diversified revenue streams and market positioning.

Robust Contract Value Growth Signals Strong Pipeline

The growth visibility appears encouraging with key contract metrics showing substantial year-on-year improvements. The 9-month FY26 Annual Contract Value (ACV) reached $722 million, marking an 18% increase compared to the previous year. Additionally, New Business ACV stood at $256 million, also registering an 18% year-on-year growth.

Technology Investments Yield Productivity Benefits

The company's strategic focus on complex areas of data and AI-led product engineering is translating into enhanced growth opportunities. Early investments in intellectual properties and accelerators are demonstrating positive returns through improved productivity and the ability to scale tailored solutions. The AI-powered platform Sasva is particularly noteworthy for its role in optimizing project cycles and delivering productivity benefits to clients.

Ambitious Revenue Targets Maintained

Management has reiterated its ambitious revenue aspirations, targeting $2 billion by FY27E and $5 billion by FY30E. These targets reflect the company's confidence in its strategic direction and market positioning in high-growth technology segments.

Margin Resilience Despite Cost Pressures

Despite facing wage hike impacts of approximately 180 basis points in Q3, the company successfully absorbed these cost pressures through strategic IP-led deals that enabled upfront revenue recognition. This margin resilience has prompted Prabhudas Lilladher to revise their margin estimates upward by 60 basis points each for FY27E and FY28E.

Revised Estimates and Valuation

The brokerage has largely maintained its revenue growth estimates at 17.9% and 18.9% year-on-year in constant currency for FY27E and FY28E respectively. However, the strong Q3 margin performance has led to upward revisions in margin projections. Prabhudas Lilladher has applied a 40x multiple to FY28E earnings per share to arrive at the target price of ₹7,360, maintaining their BUY recommendation on the stock.

Persistent Systems has received an upgrade to BUY rating from Anand Rathi with a target price of ₹7,587.00, as the IT services company continues its strong growth trajectory and sets ambitious revenue targets for the coming years.

Strong Quarterly Performance Drives Upgrade

The brokerage firm highlighted Persistent Systems' consistent performance, with the company delivering 4.10% quarter-on-quarter and 17.30% year-on-year constant currency revenue growth to $423.00 million. This growth was supported by a healthy order book and continued deepening of relationships with large clients.

Ambitious Revenue Targets and Strategic Focus

During the quarter, management positioned the company's medium-term ambition of achieving $2.00 billion revenue by FY27 and $5.00 billion aspiration by FY31. This growth strategy is expected to be led by AI-led, platform-driven execution, reflecting the company's focus on emerging technologies and innovative service delivery.

The company's growth was broad-based, with BFSI leading the charge while both Europe and North America regions demonstrated strong year-on-year growth. This geographical diversification supports the company's resilient business model.

Deep Domain Expertise and Client Concentration

Persistent Systems continues to emphasize its deep domain expertise playbook, which is anchored in its top accounts. The company generates approximately 82.00% of its revenue from the top 100 clients, with this concentration increasing by more than 20.00%. This client concentration strategy supports both near-term growth momentum and multi-year wallet-share expansion opportunities.

Recent Financial Performance

The company's standalone performance for December 2025 showed robust growth, with net sales reaching ₹3,718.50 crores, representing a substantial 23.88% year-on-year increase. This strong financial performance underpins the positive analyst sentiment and upgrade decision.

Anand Rathi's upgrade reflects confidence in Persistent Systems' ability to maintain its consistent compounding narrative while executing on its ambitious growth plans through strategic focus on AI-driven solutions and platform-based service delivery.