IT Midcap Persistent Systems posted 5 per cent dip in sequential revenue to Rs 7.5 billion and 19.6 per cent dip in profit over the same period to Rs 737 million for the fourth quarter.
On a year on year basis the company saw revenue grow 3.5 per cent and profits grow by 1.3 per cent beating street estimates. Dollar revenue grew 7.3 per cent to $116.95 million in Q4.
The company took a 20.6 per cent hit on its IP led revenue over the past quarter. Last month Persistent's shares crashed almost 10 per cent after the company said Intellectual property (IP) based revenues were expected to drop by almost $8 million (actual impact $6.7 million).
Analyst hopes on digital revenues paid off with digital share increasing 200 basis points to 24 per cent.
"In the last two years, our focus on digital has helped us build capabilities in key technology areas and experience in helping customers as they transform to being software driven businesses," said Anand Deshpande, Chairman and Managing Director, Persistent Systems.
Earnings before interest, tax, depreciation And amortization (EBIDTA) took a hit of 19.2 per cent sequentially to drop to Rs 1110.62 million which is 6.5 per cent higher than the year ago period. EBITDA for FY18 stood at Rs 4687.19 million.
For the fiscal year ended in March the company posted revenue of Rs 30 billion growing at 5.4 per cent. IP led revenue contribution dropped 450 basis points over the quarter to 22.3 per cent of total revenue share.
Deshpande added that the company is doubling down on three industry markets – financial services, healthcare & life sciences and Industrial Internet of things (IoT) in addition to strong presence in software and technology.
IP revenues were hit due to seasonal weakness in their IBM business as well as the scale down of an IP product from the company. Management commentary on IBM sales channel is still awaited. Alliance segment revenues reached their lowest in five quarters to 24.3 per cent of revenue share from almost 30 per cent last quarter.
The company shed headcount by almost 500 to bring the total employee number to 8976 over the year. Utilization however improved 270 basis points to 79.2 per cent for FY18.
Persistent stocks closed 2.65 per cent lower at Rs 725.85 at closing time.