India's Persistent Systems beats Q2 revenue estimate on strong order book

BENGALURU (Reuters) - Indian IT services provider Persistent Systems on Wednesday reported better-than-expected second-quarter revenue, helped by robust order bookings.

The company's revenue rose around 18% to 24.12 billion rupees ($289.8 million) for the quarter ended September 30, while profit rose nearly 20% to 2.63 billion rupees.

Analysts were expecting revenue of 24.04 billion rupees, with profit of 2.59 billion rupees, according to LSEG data.

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WHY IT MATTERS

Indian IT services companies started the second-quarter earnings on a weak note, with top firms Infosys and HCLTech trimming full-year revenue outlooks amid tough macroeconomic challenges.

Analysts have flagged that a near-term waning demand is likely, adding that previous project wins can offset major margin compression for Persistent Systems. The company said order bookings for the quarter were at $479.3 million, compared to $367.8 million in the previous year.

PEER COMPARISON

Valuation (next 12 months) Estimates (next 12 months) Analysts' sentiment

RIC PE EV/EBITDA Revenue growth profit growth Mean rating Number of analysts Stock to price target Div yield

(%)

Persistent Systems 34.32 21.50 15.54 24.16 HOLD 34 1.06 0.69

Tech Mahindra 20.64 13.51 4.71 12.94 HOLD 40 1.04 2.70

LTIMindtree 28.45 19.55 11.50 16.26 HOLD 36 0.98 1.16

Mphasis 23.72 15.26 6.33 9.36 HOLD 28 0.97 2.12

* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

JULY-SEPTEMBER PERFORMANCE

-- All data from Refinitiv

-- $1 = 83.2440 Indian rupees

(Reporting by Manvi Pant in Bengaluru; Editing by Varun H K)