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Investing.com - UBS initiated coverage on Persistent Systems Ltd. (PSYS:IN) with a Buy rating and a price target of INR6,730.00 on Monday.
The investment firm cited Persistent’s strong execution, noting it has been India’s fastest-growing IT services company from fiscal years 2020 to 2025, with significant market share gains over the past five years according to Gartner data.
UBS highlighted the company’s resilient margins, which have increased approximately 600 basis points during the same period, while most peers experienced range-bound performance or declines.
The firm also pointed to Persistent’s focused exposure to product engineering, limited exposure to legacy services, and what UBS considers the strongest positioning among mid-tier and large-cap peers for the upcoming generative AI cycle.
According to UBS’s analysis, current valuations of around 44 times 12-month forward price-to-earnings ratio appear to price in flattish margins and a 14-15% revenue compound annual growth rate, which the firm views as pessimistic compared to its fiscal 2025-2028 estimates of 16-17% revenue growth and 150 basis point margin expansion.
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