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- 25 Apr 2023
- ICICIdirect Research
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PERSISTENT REPORTS STRONG SERVICES REVENUE BUT DIP IN IP REVENUE DRAGS OVERALL NUMBERS
PERSISTENT - 5495 Change: -98.00 (-1.75 %)News: Persistent reported growth of 3.5% QoQ CC growth in Q4FY23 while in dollar & rupee terms growth was 3.9%. Geography wise Europe (10.3% of mix) grew 16.8% while US (77.9% of mix) grew 4.9%. Vertical wise, hi-tech grew 4.3% and life science & financial services grew 4.4% and 2.9%, respectively. EBIT margin of the company was flat sequentially at 15.4%. LTM attrition of the company declined 180 bps QoQ to 19.8%. The company during the quarter won TCV of US$421.6 mn, down 4.2% QoQ, up 16.8% YoY. For FY23, revenue grew 35.3% in dollar terms while in rupee terms it grew 46.2%. The company, for FY23, reported an EBIT of 14.9%. The company declared a final dividend of Rs12 per share & special dividend of Rs10 per share taking the total dividend pay out to Rs 50 per share for FY23
View: The company achieved US$1 bn TTM revenues milestone for the quarter, which was as per its guidance a few quarters back. If we analyse revenue for the quarter, services revenues (93% of mix) reported a rebound after furlough impact last quarter while IP led revenue (7% mix) reported a sharp decline on a QoQ basis. As per our understanding IP revenues have largely three components i) revenues from top client ii) revenues from non-top clients iii) from their own IPs. Revenue from top client has shown strong growth for the quarter and, hence, decline could be from non-top clients or their own Ips in our view for the quarter. Services revenues could have better but dip in utilisation must have some impact there . TCV was strong on YoY but there was a marginal dip in QoQ which could be a base effect (TCV was up 20% QoQ in Q3)
Impact: Positive