Why Is Nuvama More Bullish on Persistent Systems After a Strong Q3FY26?
About Persistent Systems
Persistent Systems is a mid-cap IT services company focused on software engineering, cloud, data, and AI-led digital transformation. The company has differentiated itself through proprietary platforms, strong client mining, and consistent execution across global verticals.
Nuvama Institutional Equities has reiterated its Buy rating on Persistent Systems while raising the target price to ₹7,700 from ₹7,000, reflecting confidence in sustained growth, improving margins, and monetisation of AI-led platforms.
Q3FY26 Performance Highlights
🔹 Strong, broad-based growth across verticals
🔹 Healthcare, BFSI, and Hi-tech led revenue momentum
🔹 Growth was resilient despite a cautious global IT environment
The brokerage highlighted that Persistent delivered one of its strongest quarters, with growth well distributed across industries rather than being dependent on a single vertical.
Market participants often align IT sector exposure alongside broader indices using Nifty Trading View.
Deal Momentum and Order Book Strength
| Metric | Observation |
|---|---|
| TCV | Healthy and diversified |
| ACV | Strong deal additions |
| Client traction | Sustained across geographies |
Nuvama believes Persistent’s deal momentum provides strong revenue visibility, supporting growth even amid elongated decision cycles for global IT spending.
|
Margin Drivers
🔹 AI-led platform monetisation 🔹 Operating leverage from scale 🔹 Cost optimisation initiatives |
Margin Headwinds Absorbed
🔻 Wage hikes during the quarter 🔻 Continued talent investments 🔻 Higher R&D spend |
Management reiterated that proprietary AI platforms are emerging as a key differentiator, driving both revenue growth and margin expansion by improving pricing power and delivery efficiency.
Valuation and Earnings Outlook
Nuvama has upgraded EPS estimates, factoring in a structurally higher margin profile and rolling forward its valuation horizon. While valuations remain premium versus peers, the brokerage believes the quality of growth and execution justifies the multiple.
Investors also monitor IT stocks in relation to broader market trends using BankNifty Trading View.
Investor Takeaway
Derivative Pro & Nifty Expert Gulshan Khera, CFP®, believes Persistent Systems stands out among mid-cap IT players due to its AI platform-led differentiation, consistent deal wins, and resilient margin profile. While valuations remain rich, disciplined execution and scalable platforms support long-term compounding potential. Deeper analysis and insights are available at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Persistent Systems
Why did Nuvama raise Persistent Systems target price?
How is AI monetisation impacting Persistent margins?
Which verticals drove Persistent’s Q3FY26 growth?
Is Persistent Systems valuation too expensive?
What are the long-term growth drivers for Persistent?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
