Persistent Systems at new low

Persistent Systems has hit a new 52-week low today at Rs.550.95, going down almost 17%  and it continues to remain very firmly in the red.

The company posted a very muted set of numbers for Q2FY19, missing most estimates. The market was aware that dollar earnings were sure to take a hit due to softer growth in Digital SBU and also on account of QoQ weakness expected in IBM alliance business. But none had estimated that the dollar earnings would show a fall of 4% (QoQ) at $118.23 million. This, to a large extent spooked the analysts.

In terms of growth in rupee terms, revenue was almost static, up just 0.2% (QoQ) at Rs.835 crore while net profit was at Rs.88 crore, up 0.9%. Its operating profit rose 4% at Rs.103 crore while margins jumped up from 16.78% to 17.2%.

The company has explained that the shortfall in digital revenue can be attributed to short closure of one of its projects and a shift in the business mix as some projects moved offshore.