Persistent Systems Shares Dip 3% Post-Q3; Brokers Divided on Outlook

Persistent Systems saw its stock fall over 3% in early trade following its Q3 results, even as underlying performance drew mixed reactions from brokerages. Motilal Oswal maintained a ‘Buy’ rating with a target of ₹8,500 (34% upside), citing strong fundamentals. The firm highlighted margin expansion to 16.7% (up 40 bps QoQ) despite wage pressures, driven by AI-powered tools like SASVA and GenAI Hub enabling tool-led pricing and productivity gains—contributing ~150 bps in margin benefit. Revenue growth beat estimates, led by BFSI and healthcare, keeping FY27 targets intact. Strategic AI partnerships also signal deeper enterprise adoption ahead. In contrast, Nomura retained a ‘Neutral’ rating at ₹6,100 (4% downside), acknowledging the margin beat from AI-driven pricing, currency tailwinds, and utilization improvements—but remains cautious due to elevated valuations relative to mid-cap IT peers. While both agree on operational strength and AI's growing role, Motilal sees long-term upside, whereas Nomura advises patience amid rich multiples. The divergence reflects broader market debate: whether near-term execution excellence justifies premium pricing or if valuation constraints limit near-term momentum.