Persistent Systems Reports Strong Q2 FY26 Results, Reaches $1.5 Billion TTM Revenue
Persistent Systems reported strong Q2 FY26 results with $406.2 million revenue and 16.3% EBIT margin. The company highlighted robust order book, client growth, and significant progress in its AI strategy and ESG initiatives.
The announcement details strong financial results, including continued revenue growth and margin expansion, which directly impact investor perception and valuation. Strategic initiatives in AI, significant deal wins, and positive management commentary on future growth (aiming for $2 billion by FY27) indicate a strong business trajectory and potential for sustained performance. ESG upgrades also enhance the company's standing.
The company reported strong financial performance with significant year-on-year growth in revenue, EBIT, and PAT. Positive trends in client metrics, geographic performance, and industry segments, coupled with strategic advancements in AI and ESG recognition, contribute to a positive outlook.
Persistent Systems Limited announced robust financial performance for Q2 FY26, ending September 30, 2025, along with strategic advancements in AI and operational updates. The key highlights are: * Financial Performance (Q2 FY26): * Revenue: $406.2 million, up 4.2% QoQ and 17.6% YoY. In rupee terms, ₹35,807.2 million, a growth of 7.4% QoQ and 23.6% YoY. * Constant Currency Growth: 4.4% QoQ. * EBIT Margin: 16.3%, a 230 basis points improvement YoY. In INR, EBIT was ₹5,837.4 million, up 43.7% YoY. * Profit After Tax (PAT): ₹4,714.7 million, up 11% QoQ and 45.1% YoY, translating to a PAT margin of 13.2%. * Earnings Per Share (EPS): ₹30.3 per share, up 43% YoY. * Trailing 12-month revenue exceeded $1.5 billion, with an annualized run rate over $1.6 billion. * Order Book: * Total Contract Value (TCV): $609.2 million, with new bookings at $350.8 million. * Annual Contract Value (ACV): $447.9 million, including $254.4 million from new bookings. * Client & Geographic Metrics (YoY Growth): * Top 5 clients' revenue up 23.4%; Top 10 up 22.4%; Top 20 up 22.7%; Top 50 up 21.4%. * North America grew 15.4%, Europe 37.9%, India 19%, and Rest of World 19.8%. * Industry Segments (YoY Growth): Led by BFSI (30%), followed by Software Hi-Tech & Emerging Industries (15.5%), and Healthcare Life Sciences (6.6%). * EBIT Margin Walkthrough: Tailwinds included zero cost for software licenses (80 bps), favorable currency movement (60 bps), and planned offshoring (30 bps). Headwinds included higher provision for doubtful debts (50 bps), decline in utilization (20 bps), and increased depreciation (20 bps), resulting in a net 80 bps sequential increase. * Key Organizational Updates: * Merit increments implemented for all global employees effective October 1, 2025. * Jaideep Dhok promoted to Chief Operating Officer effective August 2025. * AI Strategy and Progress: * Shifted to an AI-led platform-driven strategy with three pillars: AI for Technology (e.g., SASVA platform, 75 patents filed), AI for Business (e.g., ProcessIntel, agentic processes), and Enterprise Data Readiness for AI (e.g., iAura, GenAI Hub). * New partnerships with Digital Ocean and Anthropic. * Internal AI adoption: 'Persistent AssIst' framework won two CII National AI Awards 2025. Recommended for ISO 42001 certification for AI management systems. * ESG Recognition: Rated AA on MSCI ESG ratings (up from BBB), 77 by NAC Sustainability Ratings, 81.7 by SES ESG Research, and named one of India's Leading ESG Entities for 2025 by Dun & Bradstreet. * Outlook: Management remains committed to strengthening capabilities and infusing AI, making steady progress towards the aspiration of reaching $2 billion by end of FY27. * Q&A Highlights: Management expressed confidence in future growth, noting broad-based TCV/ACV wins and pipeline. They affirmed a balanced approach to margins, investing in growth and AI capabilities. BFSI and Europe continue strong growth, while healthcare is expected to return to growth. AI is seen as a positive driver for market share capture.
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Persistent Systems Limited filed this with the NSE as a statutory disclosure, categorised under quarterly results. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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