Persistent Systems Limited (PSL) beats estimates; Q4 witnessed strong deal
by admin- Friday, April 29th, 2022 04:26:00 PM
- Persistent Systems Limited (PSL) beats estimates; Q4 witnessed strong deal TCVs, robust net headcount additions, and strong client mining; ACV remained strong at $943.1 million in FY2022.
- Revenue growth would be supported by broad-based demand, robust deal intake, client mining, and incremental revenue from acquisitions. PSL is well positioned to once again deliver market-leading growth in FY2023.
- Management remains confident of delivering sustainable margin in FY2023 on strong revenue growth, flattening pyramid, and gradual increase in realisation.
- We retain Buy with a PT of Rs. 5,550, given strong revenue growth potential, robust ACV, and building growth avenues via tuck-in acquisitions.
Valuations (Consolidated) Rs cr
Particulars |
FY2022 |
FY2023E |
FY2024E |
FY2025E |
Revenues |
5,710.7
|
7,438.8
|
8,950.5
|
10,364.3
|
OPM (%) |
16.8
|
17.0
|
17.8
|
18.0
|
Net Profit |
690.4
|
858.8
|
1,073.3
|
1,238.5
|
EPS |
90.3
|
112.4
|
140.4
|
162.1
|
EV/EBIDTA |
35.7
|
26.5
|
20.4
|
17.0
|
ROE (%) |
22.4
|
23.7
|
25.4
|
25.1
|
ROCE (%) |
26.0
|
26.1
|
28.8
|
29.1
|
Actual vs estimates
Quarter Ended |
Q4FY22A
|
Q4FY22E
|
Var (%)
|
Revenues In USD (mn) |
217.3
|
214.8
|
1.2
|
Revenues In INR (Cr) |
1637.9
|
1617.2
|
1.3
|
Operating profit |
281.2
|
269.5
|
4.3
|
EBIT |
230.0
|
219.3
|
4.9
|
Net Profit |
201.0
|
182.6
|
10.0
|
EPS (Rs) |
26.3
|
23.9
|
10.1
|
|
|
|
|
OPM (%) |
17.2
|
16.7
|
50
|
EBIT Margin (%) |
14.0
|
13.6
|
48
|
NPM (%) |
12.3
|
11.3
|
98
|