Persistent Systems: ‘On strong footing’ – BUY
CMP Rs388, Target Rs475, Upside 22.4%
Persistent Systems limited (PSL) is a leading services provider in niche and rapidly growing outsourced software product development (OPD) space. With nearly two decades of concerted product development efforts and strong long-term relationships with top global software vendors, Persistent finds itself at a great vantage point in the OPD market. The increasingly compelling advantages of OPD and early investments in cloud computing, mobility, collaboration and analytics should enable the company to ride the next wave of growth. We estimate revenue/earnings CAGR of 24%/14% over FY11-13. Available at attractive 9.1x FY13E earnings, Persistent is a strong BUY.
