Persistent Systems Q1 FY27 Results (NSE: PERSISTENT)
Signal: Margin pressure
The read
Standalone Q1FY27 shows robust revenue growth (+26.4% YoY) but a sharp margin contraction of ~146bps in EBIT margin to 12.7%, driven by a 72.5% surge in other expenses. Profit growth (+9.5%) lagged revenue. The standalone results may not be representative of the group's performance given the recent Nagarro acquisition and $650M+ deal; consolidated numbers are not available in this filing.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹411.78 Cr | 26.4% | 4.0% |
| EBIT | ₹52.31 Cr | 13.4% | |
| Net profit | ₹40.2 Cr | 9.5% | |
| EPS | ₹25.7 | 8.4% | |
| EBIT margin | 12.7% |
P&L walk
Standalone revenue grew 26.4% YoY, but EBIT margin compressed 146bps to 12.7%, driven entirely by a 72.5% YoY surge in other expenses (to 20.7% of revenue from 15.2%), partly offset by an improvement in subcontracting costs (down 300bps to 25.2%) and steady employee cost. PAT grew 9.5% YoY, lagging revenue.
Key positives
- Revenue grew 26.4% YoY to ₹41,178 lakh, accelerating from the 25.1% in Q4FY26 consolidated (standalone comparable not given).
- Employee cost as % of revenue improved 100bps to 39.5%, and subcontracting cost dropped 300bps to 25.2%, reflecting better delivery mix.
Key concerns
- EBIT margin compressed 146bps YoY to 12.7%, entirely due to a 72.5% jump in other expenses (to 20.7% of revenue from 15.2%).
- Net profit growth of 9.5% lags revenue growth by ~17pp, signaling cost pressure beyond compensation and subcontracting.
Research and educational content only. Not investment advice.