Persistent Systems share price falls 3%, drops 9% YTD; should investors buy or book profits?

Persistent Systems share price dropped nearly 3 per cent in intraday trade on the BSE on Thursday, June 19, looking set to extend losses to the second consecutive session. Persistent Systems share price opened at ₹6,013.50 against its previous close of ₹6,025.30 and dropped 2.6 per cent to hit an intraday low of ₹5,866.60. Around 11:25 AM, the IT stock traded 2.32 per cent down at ₹5,885.80. Equity benchmark Sensex was 0.05 per cent down at 81,401 at that time.

Persistent Systems share price trend

Persistent Systems share price has declined about 9 per cent year-to-date (YTD), underperforming the sectoral benchmark Nifty IT which has climbed over 4 per cent this year so far.

The stock hit a 52-week low of ₹3,765.20 on June 19 last year and a 52-week high of ₹6,788.80 on December 20.

Persistent Systems: Is it a stock to buy?

The IT sector is experiencing challenging times due to a growth slowdown in key markets, AI-driven disruption, and tariff-related uncertainties.

However, experts expect the sector to witness decent growth due to a healthy deal pipeline and a shift toward cost-optimisation and initiatives for technological advancements.

Mirae Asset Sharekhan believes Persistent is well-placed to capture a significant chunk of spends in digital technologies as well as opportunities in vendor consolidation and cost optimisation.

"The company is confident of the trajectory towards achieving its $2 billion aspirational near-term revenue target by FY27 and has set a new aspiration of reaching $5 billion in revenue by FY31. Management remains committed to a guidance of a 200-300 bps improvement in margins by FY27. We believe the company is on a robust trajectory toward its $2 billion revenue goal by FY27, leveraging a $1.5 billion run rate and proven growth resilience," said Mirae Asset Sharekhan.

The brokerage firm has a buy call on the stock with a target price of ₹7,000.

Sharekhan pointed out that Persistent Systems delivered a robust FY25 and is on a strong growth trajectory toward its $2 billion revenue goal by FY27, leveraging on strong order inflow and robust deal pipeline despite macro uncertainty.

Sharekhan believes key verticals, including BFSI, technology, healthcare and life Sciences, may lead to growth in FY26.

Moreover, despite utilisation peaking, Sharekhan said there are adequate margin levers to support margin improvement, aligning with management’s commitment of 200-300 bps margin improvement by FY27.

"We expect sales and PAT CAGR at nearly 18 per cent and 23 per cent, respectively, over FY25-FY27E. We maintain a buy rating on the stock with a revised target price of ₹7,000 (51 times FY27E EPS), which is reasonable, given its consistent top quartile performance and strong positioning on the aspired growth trajectory," said Sharekhan.

While the stock appears to be a buy for the long term, technical experts point out that a fresh upside is possible only if the stock sustains above ₹6,100 on high volumes.

Anshul Jain, the head of research at Lakshmishree Investments, u Persistent Systems is forming a bullish 75-day-long cup and handle pattern on the daily chart.

"While price action remains strong, the absence of significant accumulative volumes is causing the breakout at ₹5,978 to struggle. For the bullish momentum to sustain and validate the pattern, the stock must breach and sustain above ₹6,100 on high volumes," said Jain.

"Such a breakout would indicate institutional participation and is likely to lead the stock towards ₹6,500, aligning with the measured move of the pattern," Jain said.

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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.