Persistent Systems is banking on deal wins to sustain growth momentum
The Pune-based mid-tier IT services firm has clocked $225-300 million in average deal wins over the past four quarters, a trend that CEO Sandeep Kalra said was likely to continue. “The fact that we have done a good set of deals now should bode well for us in the future,” he said. The growth had been broad-based and across sectors, he added.
Persistent Systems Q2 Results FY22: Earnings Snapshot
- Net profit rose 6.9% quarter-on-quarter to Rs 161.75 crore in the three months ended Sept. 30, on the back of revenue that increased 9.9% to Rs 1,351.24 crore.
- Earnings before interest, tax, depreciation and amortisation — a key metric to check a company’s operational profitability — stood at Rs 224.39 crore. The Ebitda margin came in at 16.6%.
- The order booking for the second quarter stood at $282.5 million in total contract value and $201.1 million in annual contract value.
- The company’s net headcount increased by 975 in Q2, even as the attrition rate increased to 26.6% from 16.6% in the previous three-month period.
To be sure, Persistent Systems has been hard at work growing its top 40-50 accounts, in an endeavour to clock $1 billion (about Rs 7,300 crore) in revenue. As a result, the contribution of the Top 10 clients to the total revenue has declined — from 50.5% to 45.4% — in the past four quarters.
- The number of large clients (over $5 million) increased from 16 to 22.
- The number of medium-sized clients ($1-5 million) increased from 63 to 84
“It’s basically the outcome of our strategy to mine customers across. We are focusing on the Top 50 customers for that growth. If we want to grow to $ 1 billion and then to $ 3 billion, we can’t only focus on the Top 10,” Kalra said. Persistent Systems is also working on expanding its talent pipeline and increasing its onsite and nearshore presence in places like Canada and Mexico, now that travel is starting to open up, he added.