Persistent Systems is optimistic about surpassing its margin growth guidance of 15% for FY25 and is aiming to increase it by an additional 300 basis points by FY27, as it works toward achieving its $2 billion revenue target, according to the company’s Chief Executive Officer, Vinit Teredesai
Persistent Systems reported an Ebit margin of 14.9% in Q3, up from 14.5% in the preceding quarter. The reported Ebit margin was in line with the company’s guidance of 15% that it had set for FY25.
In an interview with NDTV Profit, Teredesai said the company’s cost optimisation programme was a key factor in margin expansion in Q3. He added that if things went well, the company could potentially exceed its margin target for FY26.
“This quarter, we were able to expand the margins to 14.9% with our cost optimisation programme, and disciplined execution. At this point in time, we are pretty confident we will not only achieve, but also exceed the margins we have defined. And that basically sets a good context for FY26,” he said.
The top executive mentioned that on its way to reach a $2-billion revenue goal by FY27, Persistent Systems also wants to expand margins by another 300 basis points.
“We would like to ensure that as we reach our $2-billion goal by FY27, we have also expanded our margins by 200 to 300 basis points,” he said.
In terms of discretionary spending, Teredesai said the mood among clients is positive, but that may not mean they are ready to spend money yet.
However, Persistent Systems sees “enough opportunities” other than discretionary spending.
“There are enough opportunities available in the current environment itself. If the environment becomes better, it’s only going to benefit us further. What I’m saying is the mood is definitely positive. Our (order) bookings give us confidence that Q4 will be equally good,” the CFO said.
Teredesai is also of the opinion that Persistent Systems will achieve its margins and growth targets.
“As far as industry-leading growth and margin trajectory is concerned, we should be there,” he said.
Shares of Persistent Systems Ltd. soared 11.9% to scale an intraday high of Rs 6,359.10 on the NSE on Thursday. The stock was up at Rs 6,338.35 at 12:55 pm, while benchmark Nifty 50 was up 0.35% at 23,235.60 points.
. Read more on Business by NDTV Profit.Persistent Systems reported an Ebit margin of 14.9% in Q3. Read MoreBusiness, Markets
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