HDFC Securities: Persistent Systems Q2 Review - Transformation In Motion
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HDFC Securities Report
Persistent Systems Ltd.’s relative outperformance in FY21 and growth acceleration (20% earnings per share compound annual growth rate over FY20-23E) is driven by:
Recovery in technology services (deal sourcing, partnerships, client mining, and improving annuity)
Better operational rigour and business synergies improving the operating profile translating into 22% free cash flow CAGR over FY2023E.
Revival in alliance business (Red Hat, Dassault Systems) and prospects of better capital allocation (cash approximately 19% of market cap) are value-accretive triggers.
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