Persistent Systems upbeat on banking, insurance to drive growth: CEO

Strong deal wins across the US and Europe are expected to offset weakness in parts of the healthcare business, while the Nagarro acquisition will strengthen its Europe presence.

Persistent Systems said banking and insurance will remain the bulwark of its growth in the near future, as healthy deal wins across the US and Europe will offset weakness in certain pockets of the healthcare and life sciences business.

 

Banking, financial services and insurance (BFSI) contributed 34 per cent to the top line in the first quarter of 2026-27 (Q1FY27), up from 31.6 per cent two years ago.

 

On the other hand, healthcare slipped to 25.3 per cent from 27.3 per cent during the same period. Software, high tech and emerging industries added about 41 per cent.

 

“Certain sections in healthcare, especially the provider segment, still remain a little lumpy. Outside that, we should see a fairly decent growth in segments like scientific instruments, medical devices, pharma, and payer. For BFSI, we have a good set of traction in banking across the US and Europe as we have deals that should rectify into bigger revenues there,” Sandeep Kalra, chief executive officer (CEO) and executive director (ED), Persistent Systems, said in an interaction.

 

 

For the first quarter, Persistent’s profit after tax (PAT) was up 13.7 per cent to ₹483 crore while revenue was up 29 per cent to ₹4,303 crore. On constant currency, it grew 16.5 per cent, one of the highest among all IT service providers.

 

The company’s total contract value (TCV) for the first quarter was $1.15 billion, helped largely by the $650 million engagement it signed with a US technology company for more than six years. It would focus on product development, product support, Cloud service operations and support.

 

Kalra said the large deal was a cost reduction play where Persistent will take certain number of software-as-a-service (SaaS) products for development support from an operations perspective and deliver them at a lower cost. It would also reduce Cloud consumption that goes into the SaaS platforms.

 

Mid-tier companies have yet again performed way better than their large peers, especially Coforge and Persistent. They have seen healthy TCVs and high revenue.

 

Persistent bought German digital engineering company Nagarro for more than euro 1 billion in June, which will help it have a bigger presence in Europe. This comes as it looks to reduce its overdependence on US, which now contributes four fifths of revenue. It will still take a few more months for the company to leverage benefits from the deal as it awaits nod from regulators and shareholders.

 

While salary hikes will be effective from the second quarter, which will pose a 180-200 basis points (bps) headwind to margins, Persistent said the impact would largely be mitigated through operating leverage, improving utilisation and offshoring.