Persistent Systems reports 9 per cent rise in net profit

Mid-size IT firm Persistent Systems has reported a 9 per cent growth in its net profit to ₹90 crore for the June 2020 quarter, helped by increase in revenues despite the COVID-19 pandemic.

The Pune-headquartered company had posted a net profit of ₹82.47 crore during the corresponding quarter of the previous financial year, it has said in a BSE filing.

Its revenues jumped over 17 per cent to ₹1,012 crore during the quarter as compared with ₹862 crore a year ago, the company added.

Persistent Systems CEO Christopher O’Connor told PTI that the company hopes to maintain the momentum as the company has a good pipeline of deals.

He added that the firm has rolled back the salary cuts for the senior management, and will be looking at achieving other milestones through the course of the year to initiate other measures, including a re-look at annual salary hikes.

A slew of Indian IT companies are reporting a setback to business because of the pandemic, as overseas clients delay work due to issues of their own and also cut on discretionary spends that has affected new contracts.

O’Connor said a quick shift to ensure all the 11,000 staff work from home, coupled with deal wins, has helped the company post 17 per cent rise in revenue during the quarter.

Without sharing details on the total contract value closed for the quarter, he said the company has a good pipeline of deals it is bidding for and hopes to maintain the momentum.

Its top customer, IBM, contributes over 23 per cent of the revenues, and the healthcare and the BFSI (banking, financial services and insurance) segments are also doing well, he said adding that IBM’s revenue grew 6.6 per cent quarter-on-quarter, while the same for BFSI was 5 per cent and healthcare was 6 per cent.

He, however, said there can be “surprises” in the future because of the overall economic environment and the COVID-19 situation, and the company is conscious of the same.

Higher utilisation of the staff was among the factors that led to an increase in operating margin to 10.4 per cent, he said adding that the margins will be stable in the near term and the company is targeting to increase it to 12 per cent in the long term.

The total number of employees went up to 10,829 in June as against 10,632 a year ago, and the company’s chief executive officer said it has hired people across the board.

The company’s shares on Monday ended higher by ₹84.10, or 10.88 per cent, at ₹857.25 apiece on the BSE.