Synopsis:
Shares of a leading IT services firm surged over 7% after reporting strong Q2FY26 results, with significant YoY and QoQ growth in revenue and net profit. Analysts highlighted robust margins, record contracts, and healthy deal pipelines, boosting investor confidence.
The shares of a prominent IT services provider gained up to 7.4 percent in today’s trading session after the company’s revenue and net profit maximized by 24 percent and 45 percent YoY, respectively, in Q2FY26.
With a market capitalization of Rs 89,348.19 crore, the shares of Persistent Systems Ltd were trading at Rs 5,718.00 per share, increasing around 7.09 percent as compared to the previous closing price of Rs 5,324.25 apiece.
Q2FY26 Highlights
The shares of Persistent Systems Ltd have seen significant movement after announcing its financial performance in Q2FY26, in which revenue increased by 24 percent on a year-on-year basis from Rs 2,897 crore in Q2FY25 to Rs 3,581 crore in Q2FY26. However, on a Quarter-on-Quarter basis, revenue zoomed by 7.4 percent from Rs 3,334 crore in Q1FY26 to Rs 3,581 crore in Q2FY26.
Moreover, net profit increased by 45 percent on a yearly basis from Rs 325 crore in Q2FY25 to Rs 471 crore in Q2FY26, meanwhile, on a quarter-on-quarter basis, net profit jumped by 11 percent from Rs 425 crore in Q1FY26 to Rs 471 crore in Q2FY26.
Brokerage views
As per the brokerage, Persistent Systems’ Q2 results exceeded expectations, with constant currency revenue up 4.4% QoQ versus the 3.9% estimate. EBIT margins improved 80 basis points to 16.3%, above the projected 15.7%, reflecting strong operational efficiency and robust business performance, highlighting the company’s ability to sustain growth and margin expansion.
CLSA, one of the well-known brokerages globally, retained its ‘High Conviction Outperform’ rating on this IT stock with a target price of Rs 8,270 apiece, indicating a potential upside of 45 percent from Wednesday’s closing price of Rs 5,709.6 per share.
The brokerage said that Persistent Systems delivered a robust quarter, supported by growth in order book, revenue, margins, ROE, and free cash flow conversion. This performance addresses key investor concerns and reinforces confidence in the company’s operational efficiency and financial health.
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Moreover, Management reaffirmed a $2 billion revenue target by FY27, with 100bps EBIT margin expansion in FY26–27. CLSA raised FY26–28 EPS estimates by 1–4%, projecting a 29% CAGR in EPS over FY25–27, reflecting strong growth and profitability prospects.
Additionally, the company achieved record contract metrics, with total contract value (TCV) reaching $609 million, up 17% QoQ and 15% YoY. Annual contract value (ACV) also hit $448 million, a 29% YoY increase, significantly above the four-quarter average of 11%, highlighting strong client demand and business momentum.
Other brokerages like HSBC maintained a ‘Hold’ rating on Persistent Systems, citing strong Q2 growth, improved profitability, and recovery in deal wins. Nomura stayed ‘Neutral,’ highlighting all-round performance and a healthy deal pipeline, raising FY26–28 earnings forecasts by 3–5%. Among 42 analysts, 24 recommend ‘Buy,’ eight ‘Hold,’ and 10 ‘Sell,’ reflecting mixed market sentiment.
Persistent Systems is a global technology services company focused on Digital Engineering and Enterprise Modernization, leveraging Al to transform industries like BFSI and Healthcare. The company’s vision, ‘Re(Al)magining the World, reflects its investment in market-leading Al innovations aimed at fundamentally transforming its clients’ businesses worldwide.
Written by Abhishek Singh
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