Downside risk in Persistent Systems remains despite price correction

Due to several headwinds, brokerages have reduced their earnings per share estimates for FY25 by 5-8%

The stock of Persistent Systems is down 10 per cent over the last two trading sessions, as weaker than expected margin performance in Q4, moderation in order wins, delayed recovery in profitability coupled with stiff valuations hit investor sentiment.

Given the multiple headwinds, brokerages have cut their earnings per share estimates for FY25 by 5-8 per cent.

The key worry for the Street is the muted margin performance in Q4 and the delay in margin trajectory going ahead. The company posted profit margins of 14.5 per cent which was flat on a sequential basis and missed brokerage estimates which had pegged it