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Persistent Systems: Rupee Appreciation Hits Topline - Views on News from Equitymaster
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  • Sep 14, 2017 - Persistent Systems: Rupee Appreciation Hits Topline

Persistent Systems: Rupee Appreciation Hits Topline
Sep 14, 2017

Persistent Systems has announced its first quarter results for FY18. Sales increased 0.1% QoQ and the net profit increased 3.2% QoQ. Here is our analysis of the results.

Performance Summary
  • Consolidated sales increased 0.1% QoQ in rupee terms. In US dollar terms, the topline was up 3.6% QoQ. The appreciation of the rupee against the dollar negatively impacted the topline.
  • The operating profit was down 19.8% QoQ; while the operating margin decreased to 14.3%.
  • Profit before tax was up 8.9% QoQ. The net profit and net margin were also up sequentially.
  • The company has acquired PARX Werks AG (PARX), a platinum Salesforce consulting partner in Europe headquartered in Zurich, Switzerland.

    Consolidated Financial Performance
    Rs m 4QFY17 1QFY18 Change
    Sales 7,271 7,280 0.1%
    Expenditure 5,969 6,237 4.5%
    Operating Profit (EBITDA) 1,302 1,043 -19.8%
    Operating Profit Margin (%) 17.9% 14.3%  
    Depreciation 394 392 -0.6%
    EBIT 907 651 -28.2%
    Other Income/(Loss) 143 368 157.1%
    Exceptional Item -114 0  
    Profit Before Tax (PBT) 936 1,019 8.9%
    Tax 209 269 28.8%
    Net Profit 728 751 3.2%
    Net Profit Margin 10.0% 10.3%  
    No. of shares (m)   80.0  
    Diluted earnings per share (Rs)   37.9  
    P/E ratio (x)*   16.3  

    *On a trailing 12 months basis


    Revenue Break-up
    Rs m 4QFY17 1QFY18 Change
    By Industry      
    Services 3,192 3,240 1.5%
    Digital 1,374 1,310 -4.6%
    Alliance 2,007 2,126 5.9%
    accelerite 698 604 -13.4%
    By Geography      
    North America 6,289 6,225 -1.0%
    Europe 385 430 11.5%
    India 407 430 5.5%
    Rest of the World (RoW) 189 197 4.0%
    By Service Line      
    ISV 3,047 2,970 -2.5%
    Enterprise 2,218 2,330 5.0%
    IP Led 2,007 1,980 -1.3%
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