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Persistent Systems: A Good Quarter - Views on News from Equitymaster

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Persistent Systems: A Good Quarter
Oct 30, 2017

Persistent Systems has announced its second quarter results for FY18. Sales increased 4.6% QoQ and the net profit increased 10% QoQ. Here is our analysis of the results.

Performance summary
  • Consolidated sales increased 4.6% QoQ in rupee terms. In US$ terms, the topline was up by 4.5% QoQ.
  • The operating profit was up by 11% QoQ; while the operating margin improved sequentially to 15.2%.
  • The net profit was up 10% QoQ. The net margin improved sequentially to 10.9%.

    Consolidated Financials
    Rs m 1QFY18 2QFY18 Change 1HFY17 1HFY18 Change
    Sales 7,280 7,613 4.6% 14,058 14,893 5.9%
    Expenditure 6,237 6,455 3.5% 11,893 12,692 6.7%
    Operating Profit (EBITDA) 1,043 1,158 11.0% 2,165 2,201 1.7%
    Operating Profit Margin (%) 14.3% 15.2%   15.4% 14.8%  
    Depreciation 392 379 -3.2% 710 771 8.7%
    Other Income/(Loss) 368 336 -8.6% 497 704 41.6%
    Profit Before Tax (PBT) 1,019 1,115 9.3% 1,952 2,134 9.3%
    Tax 269 288 7.4% 485 557 14.9%
    Net Profit 751 826 10.0% 1,468 1,577 7.4%
    Net Profit Margin 10.3% 10.9%   10.4% 10.6%  
    No. of shares (m)         80.0  
    Diluted earnings per share (Rs)         39.0  
    P/E ratio (x)*         16.5  
    On a trailing 12 months basis
    Segmental Performance
    Rs m 1QFY18 2QFY18 Change
    By Industry      
    Services 3,240 3,327 2.7%
    Digital 1,310 1,591 21.4%
    Alliance 2,126 2,078 -2.2%
    accelerite 604 617 2.0%
    By Geography      
    North America 6,225 6,349 2.0%
    Europe 430 647 50.6%
    India 430 426 -0.8%
    Rest of the World (RoW) 197 190 -3.2%
    By Service Line      
    ISV 2,970 3,037 2.3%
    Enterprise 2,330 2,596 11.4%
    IP Led 1,980 1,979 0.0%
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INTRODUCTION:
Equitymaster Agora Research Private Limited (hereinafter referred to as "Equitymaster"/"Company") was incorporated on October 25, 2007. Equitymaster is a joint venture between Quantum Information Services Private Limited (QIS) and Agora group. Equitymaster is a SEBI registered Research Analyst under the SEBI (Research Analysts) Regulations, 2014 with registration number INH000000537.

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