IT firm Persistent System shares slump 9% post Q4 results with flat margins

Shares of information technology company Persistent Systems slumped 8.6 per cent at Rs 3,550 on the BSE in Monday’s intraday deals. The drop in the share price came after the company delivered its quarter four earnings for the financial year 2023-24 (Q4FY24). 

The IT services firm, reported a 25.36 per cent increase in net profit to Rs 315.3 crore year-on-year for the fourth quarter ended March 31. Consolidated revenue for the same period stood at Rs 2,590 crore, marking a rise of 14.9 per cent year-on-year. 

In Q4, the company recorded a total contract value (TCV) of $447.7 million, a slight decrease from the previous quarter's $475 million, which was its highest-ever deal win. The Ebit margin remained flat at 14.5 per cent quarter-on-quarter. 

Persistent Systems said  that it aims to improve margins by 200-300 basis points over the next two to three years. The Board recommended a final dividend of Rs 10 per equity share for the Financial Year 2023-24.

According to reports, during the earnings call, the company's management stated that their objective over the next 12 months is to sustain top-quartile growth amidst a challenging macro environment, while maintaining margins at current levels. However, their flat margin guidance for the financial year 2025 has left investors disappointed.

At 11:15 AM, the shares of the company were trading 8.11 per cent lower at Rs 3,572 a piece. In comparison, the S&P BSE was trading 0.59 per cent higher at 73,518 levels. 

The share price of persistent systems has plunged 10 per cent in the last one month, while it rallied 23 per cent in the last six months. The company is presently trading at a price to earnings multiple of 28.16 times.