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Persistent Systems, a software products and services company, will create a new industry segment to tap the rising technology spends by financial service companies in developed markets.
By first quarter-end, revenues from financial services clients will be reported under a separate vertical in the BSE-listed company’s accounts, said Mritunjay Singh, Chief Operating Officer. This would be Persistent’s fourth vertical after Telecom, Infrastructure & Systems and Life Sciences.
“The financial services segment will be a thrust area for Persistent going forward. We have had clients in this space for some years now, but now we are giving it a more focused approach as we have achieved significant scale,” Singh told Business Line .
Although the financial services segment contributes only ‘single digits’ in terms of revenue percentage, the company already has 18 clients. It dabbles in both enterprise services and product development for banks and financial institutions.
Globally, financial service firms are the largest spenders on IT products and services. The top IT firms —Tata Consultancy Services, Infosys and Cognizant — generate a lion’s share of their revenues from this segment.
However, Singh does not think that Persistent would have the disadvantage of being a late mover. His confidence stems from statistics that show that the financial services industry has underinvested in technology since 2008 because of the tightened liquidity situation.
The recent emergence of new paradigms such as social, mobility, analytics and cloud (SMAC) have compelled the financial service companies to re-prioritise their IT spends, he said.
“Thus, IT budgets are shifting to a world that we are strong in. We have been active in the SMAC space for over five years now,” said Singh. Moreover, several financial service companies now want vendors to build software products that can be spun off as standalone entities going forward — a trend that plays into Persistent’s traditional strengths, he said.
Q4 profit up 29%Separately, Persistent has reported a 29.5 per cent rise in consolidated net profit for the fourth quarter ended March 31, 2014 largely due to higher sales.
It recorded a net profit of ₹67.2 crore in Q4 as against ₹51.9 crore in the corresponding year-ago quarter.
Revenue rose by 33.8 per cent to ₹446.7 crore (₹334 crore).
For the full year ended March 31, 2014, Persistent reported a 32.9 per cent rise in net profit to ₹249.3 crore while revenue went up by 28.9 per cent to ₹1,669.1 crore.
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