In an interaction with ET, Sandeep Kalra, chief executive officer and executive director, Persistent said, “Persistent, at $1.2 billion, is competing with bigger vendors, whether they are from India or from outside and winning market share. Obviously, when you’re doing vendor consolidation, you are optimising by moving work from onset to offshore, there’s transition involved in other things involved. So, there’s a cost involved.”
According to him, “There is a clear fatigue with the larger players. The reason being they have become too big to react, too big to take care of the customers will be complacent in their own right. And they are not able to bring the latest technology to bear for the customers.”
It is now aspiring $2 billion business in the next three years.
Amid the generative AI (GenAI) technology disruption, the over $250 billion IT sector is witnessing vendor consolidation and a shrinking of deal sizes thereby leading to higher competition in deal wins across large and mid-tier software service providers.
Reporting the 17th consecutive quarter of dollar revenue growth and the 20th quarter growth in rupee terms, Kalra said, “We have seen good bookings in the last two quarters, and that will also pan out well.Overall, it’d be a growth story made by healthcare, followed by financial services followed by tech for Persistent for the next several quarters.”
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For Q1FY25, Persistent saw its total contract value (TCV) deal wins at $462.8 million, up from $447.7 million in the March quarter.For the first quarter ending June, Persistent reported a 33.9% year-on-year (YoY) rise in net profit at Rs 306.41 crore for their April to June quarter as compared to Rs 228.76 crore in the same quarter last year. However, sequentially, the profit fell 2.8% from Rs 315.3 crore.
Its revenue rose 17.9% YoY and 5.6% quarter-on-quarter (QoQ) to Rs 2,737.17 crore with jump YoY 66.8% jump in healthcare, 7.3% in banking, financial services and insurance (BFSI) and a subdued growth of 2.4% in its largest segment of software, hi-tech and emerging industries.
Chief financial officer Vinit Teredesai said its margins contracted by 50 basis points (bps) to 14% from 14.5% on the back of high visa costs towards employees under sub-contracting and employee stock options across a majority of its employees.
“If you look at it, we have increased our revenue by around $16 million this quarter. And our headcount has gone down by 330 people. Our utilisation has also increased to 82%. there is easily a scope to go up closer to 84-85%. Our long term goal is to improve our margins by 200 to 300 basis points by the in the next two to three years,” Teredesai said.
Kalra wants the company to be the disruptor in the ongoing GenAI technology disruption and is investing in building capabilities.
“We are pivoting from a human driven services company only to a tech and human driven platform So it takes investments. That is what is also making us win more,” he added.
We are investing heavily in our platforms, we are also doing small tuck-in acquisitions. Last month, the IT company had acquired New Jersey-based Starfish Associates for $20.7 million (around Rs 173 crore).
