Persistent Systems Share Price Declines Following Q2 Results

Systems Limited shares fell over 3% after the company reported a sequential drop in net profit and a margin contraction for the second quarter. Consolidated net profit declined 27% quarter-on-quarter to Rs 351.5 crore, impacted by a one-off expense of Rs 185.34 crore associated with the Nagarro deal. Revenue from operations increased 8.4% sequentially to Rs 4,663.9 crore. Operating EBIT margin contracted by 100 basis points sequentially to 15%, missing analyst projections due to wage increases, lower utilization, and deal-related amortization. Total order bookings for the quarter stood at $633.5 million in total contract value. Brokerages expressed divided opinions, as concerns over short-term margin pressures clashed with expectations of long-term revenue expansion.