Persistent Systems H1FY27 Results (NSE: PERSISTENT)
Signal: Steady quarter
The read
The key inflection is not topline momentum but weaker profit conversion: H1FY27 revenue grew 27.6% to ₹86119.72 million, while PAT rose only 7.1% to ₹8849.18 million as total expenses grew 30.7%, finance costs 70.8% and operating cash flow fell 24.0% to ₹6617.07 million. This reverses the stronger recent margin arc seen in the prior series, where OPM expanded to 19% by Q2FY26-Q4FY26, although the current filing does not disclose an H1 operating margin.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹8,611.97 Cr | +27.6% | N/A |
| Net profit | ₹884.92 Cr | +7.1% | |
| EPS | ₹56.51 | +6.2% |
P&L walk
Standalone H1FY27 revenue increased 27.6% to ₹86,119.72 million, but total expenses grew faster at 30.7% to ₹74,795.63 million, limiting PBT growth to 8.0% and PAT growth to 7.1%.
Key positives
- Revenue increased 27.6% YoY to ₹86119.72 million, maintaining a growth rate above the company’s recent H1 base.
- Employee costs rose 23.8% YoY to ₹34019.34 million, slower than revenue growth, reducing employee cost intensity to 39.5% from 40.7%.
- Subcontracting costs grew only 13.3% YoY to ₹21019.22 million, substantially below revenue growth of 27.6%.
- Cash and cash equivalents increased to ₹11956.28 million from ₹6689.09 million despite ₹2821.37 million of dividends paid during H1FY27.
Key concerns
- PAT growth of 7.1% to ₹8849.18 million materially lagged revenue growth of 27.6%, indicating weak conversion of topline growth into earnings.
- Total expenses increased 30.7% YoY to ₹74795.63 million, faster than revenue growth of 27.6%, with other expenses rising 82.8% to ₹17636.58 million.
- Finance costs rose 70.8% YoY to ₹501.41 million, a significant headwind to pre-tax profitability.
- Operating cash flow declined 24.0% YoY to ₹6617.07 million while trade receivables increased to ₹34541.88 million from ₹27450.37 million.
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