Persistent Systems dips 20% in four days post weak Q1 revenue outlook

At 1148 hours, the stock was down 5% to Rs 577, extending its 15% decline in the past three trading sessions on the NSE.

Shares of Persistent Systems dipped 5% to Rs 577, extending their 15% decline in the past three trading sessions on the NSE, after the information technology consulting & software company said that its April-June quarter (Q1) revenues in dollar terms will be marginally lower on a quarter-on-quarter basis.

Persistent Systems has guided for a marginal decline in US dollar revenues in Q1 on spillover of client-specific challenges from Q4 (January-March) and continued weakness in the traditional outsourced product development (OPD) business.

The stock opened at Rs 599 and hit a low of Rs 576 on the NSE. Till 1148 hours, a combined around 360,000 shares changed hands on the counter on the NSE and BSE.

Meanwhile, Mohit Jain, an analyst at Anand Rathi Share and Stock Brokers, has put a ‘buy’ rating on the stock. However, the analyst lowered the target price for Persistent to Rs 860 from Rs 930 earlier.

“We think that the stock overreacted after the earnings’s warning was released. We believe such opportunities should be used to gain exposure to quality companies (strong cash flows and balance sheet - at par with large caps) like Persistent on a one-year perspective,” the analyst said in a report dated June 25, 2015.