Persistent Systems

ICRA placed Persistent Systems' AA+ issuer rating on watch with negative implications on July 7, citing the company's proposed acquisition of German IT firm Nagarro SE. The rating agency said the debt-funded deal, estimated at EUR 1.27 billion, would significantly increase Persistent's leverage once completed. While the rating remains AA+ for now, ICRA noted that the transaction is likely to weaken the company's financial risk profile and could lead to a downgrade if credit metrics worsen. Persistent's existing leverage is very low, but the acquisition would be financed entirely through a bridge facility.

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, July 3 (Reuters Breakingviews) - Markets aren't trusting IT outsourcers to get anything right. Shares in India's $7.5 billion Persistent Systems PERS.NS plunged after CEO Sandeep Kalra agreed to pay a 140% premium for its buyout of Germany's Nagarro NA9n.DE. But the $1.45 bln deal helps the buyer meet long-standing strategic goals at knockdown valuation.

After dropping 11% after the acquisition was announced on Saturday, Persistent's stock pared losses but remains 5% below its undisturbed price. The visceral negative reaction channels widespread industry uncertainty about whether acquisitions are a good answer to the AI revenue deflation threat facing the industry since Anthropic and peers launched coding tools.

Indian IT companies are loaded with cash but rarely strike deals, and very few transactions are regarded as successful. Even without a premium, Persistent's returns from its purchase are unlikely to cover the Indian software industry's 10% cost of capital per data from the NYU Stern School of Business, according to Breakingviews calculations.

Yet the acquisition is transformative. It will boost Persistent's presence in Europe, more than doubling the continent's share in its top line to 22%, and give it an entry into the Middle East, Turkey and Japan. As well as reducing its reliance on North America where the Trump administration is making it harder to secure visas for skilled workers that the IT industry needs, the deal will also add capabilities in serving industrial and consumer enterprises as well as governments, where Persistent has limited presence.

The sudden global investor aversion to software stocks handed Persistent an opening to meet these strategic goals at relatively attractive valuations. Nagarro's stock has fallen 46% since the beginning of 2026, twice as much as Persistent over the same period. It is paying 19 times Visible Alpha's estimates of the target's 2026 earnings, less than its own 29 times.

Given investors are anyway in the mood to punish IT companies and pushing back against attempts by others like $44 billion Infosys INFY.NS to boost buybacks, the downside of making a bold acquisition is limited.

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CONTEXT NEWS

Persistent Systems on June 27 said it would launch an offer for all outstanding shares in Munich-headquartered Nagarro Group, valuing it at $1.45 billion including debt. The offer of 81 euros ($92.12) per share represents a 140% premium to the last traded price before the deal was announced.

(Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

** Nagarro NA9n.DE shares are up around 90% in early Frankfurt trading after Indian IT services firm Persistent PERS.NS offered to buy the German company at €81 per share, in a deal announced late Friday

** The offer represents a "nice" 100% premium to Nagarro's closing price of €40.44 on Xetra, the electronic trading platform of the Frankfurt Stock Exchange, a local trader says

** The offer values the digital engineering company at €1 billion ($1.14 billion), according to Reuters calculations

** Nagarro said in a statement that its boards support the offer and that its founding shareholder has agreed to sell its roughly 20% stake at the offer price

** Persistent shares fall 10% at 0615 GMT

($1 = 0.8783 euros)

(Reporting by Danny Callaghan)

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Persistent Systems has entered into a six-and-a-half-year strategic services agreement with an undisclosed global technology leader based in the United States, the company said on Friday. The contract, valued at over $650 million in total and $125 million annually, will see Persistent provide end-to-end product development, cloud operations, and support for the client's enterprise software portfolio. The engagement spans North America, Europe, and Asia Pacific, leveraging Persistent's AI-driven platforms and domain expertise. The client's identity is withheld due to confidentiality obligations. Persistent confirmed that none of its promoters have any interest in the client and that the agreement is in the ordinary course of business, not a related party transaction. It is expected to strengthen Persistent's capabilities and enable long-term strategic benefits.

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Persistent Systems' board has approved the acquisition of German digital engineering firm Nagarro SE through a voluntary public takeover offer at €81 per share. The Pune-based IT company formed a wholly-owned subsidiary, Galaxy Germany Holding SE, which signed a share purchase agreement to buy a 21% stake in Nagarro from its largest shareholder, Lantano Beteiligungen GmbH. Persistent also entered a business combination agreement to acquire 100% of Nagarro's outstanding share capital, subject to regulatory and shareholder approvals. To fund the deal and refinance Nagarro's debt, the company secured a €1.4 billion bridge financing facility from Barclays, backed by a corporate guarantee of up to €1.54 billion. Nagarro, headquartered in Munich, employs around 18,500 people and reported revenue of €999.3 million in CY2025. Persistent said the combination would create a $2.9 billion AI-led engineering powerhouse with 46,000-plus employees. The voluntary public offer is expected to settle in Q4 CY2026 or Q1 CY2027.

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June 1 (Reuters) - Persistent Systems Ltd PERS.NS:

• PERSISTENT SYSTEMS - TO EXPAND EASTERN EUROPEAN PRESENCE WITH INTEGRATION OF OVER 90 CONCISE PROFESSIONALS

Source text: ID:nBSE8pbrff

Further company coverage: PERS.NS

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Changes media packaging code to INDIA-IT/STOCKS and rewrites throughout

By Urvi Dugar

BENGALURU, April 24 - Revenue growth for India's top IT firms will stay muted this fiscal year, as gains from artificial intelligence would be blunted with clients cutting spending amid macroeconomic and geopolitical uncertainty, analysts said.

The Nifty IT index .NIFTYIT, the worst performing sector of 2026, shed roughly $26 billion in market value this week after earnings from market leaders Tata Consultancy Services TCS.NS and Infosys INFY.NS disappointed investors amid worries that agentic AI would disrupt the $315 billion sector and cannibalise earnings.

India's top five IT firms are expected to post muted revenue growth of about 3%-4% in the near term, said Sushovan Nayak, analyst at Anand Rathi.

The sector, which employs about 5.9 million people, had last reported double-digit revenue growth in the March 2023 quarter. Analysts had expected a falling rupee to boost revenue by 10% across the sector.

The U.S., which accounts for more than half of the revenue at most large Indian IT firms, has seen softer deal pipelines, while uncertainty surrounding immigration and tariffs persists, and geopolitical conflicts further delay long‑term technology spending decisions.

The slowdown was the most acute in the banking and financial services, which is a key revenue driver for the sector.

TCS posted its first annual revenue decline in more than two decades, and said that new AI models and tools in the market did not hurt demand for its offerings.

Infosys, HCLTech HCLT.NS and Wipro WIPR.NS trimmed their forecast for fiscal 2027's revenue growth.

Despite near‑term pressures, analysts remain confident that IT companies will eventually leverage AI to defend margins and unlock new growth opportunities.

"Revenue from AI is growing at a fast pace, but it's coming off a very low base and is hardly 5% of total revenue," said Centrum Broking's Piyush Pandey, adding that AI was weighing on pricing, particularly in legacy contracts.

Given that, mid-sized IT firms such as LTM LTIM.NS and Persistent Systems PERS.NS that have stronger digital and AI-led exposure may outperform, said Nayak.

The benchmark Nifty 50 .NSEI is down 8.6% this year so far.

(Reporting by Urvi Dugar in Bengaluru; Editing by Harikrishnan Nair)

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** Shares of India's Persistent Systems PERS.NS fall 4.32% to 5103.30 rupees; biggest intraday pct drop since February 20

** Co posted 33.6% y/y increase in Q4 profit to 5.29 billion rupees, revenue from ops rose 25.1% y/y

SOFTER FY27 OUTLOOK, MARGIN MISS OFFSET STRONG GROWTH

** CLSA ("high-conviction outperform", PT: 6520 rupees) cuts FY27/28 EPS estimates by 6%-7% after company guided for its $2 bln revenue run-rate only by 4QFY27, later than earlier expectations

** Nomura ("neutral", PT: 5200 rupees) trims FY27-28 EPS estimates by ~2%-4% after a modest revenue and margin miss in the quarter; says stock's rich valuation limits upside despite strong deal wins and pipeline visibility

** UBS ("buy", cuts PT to 6240 rupees from 6280 rupees) says revenue growth was slightly below expectations and EBIT margin missed estimates due to higher consulting, subcontracting and license costs, though deal momentum remained healthy

** HSBC ("hold", raises PT to 5755 rupees from 5675 rupees) says FY27 outlook appeared softer than expected and valuation remains steep at roughly double sector averages, limiting further upside despite sector-leading growth

(Reporting by Surbhi Misra in Bengaluru)

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April 21 (Reuters) - Persistent Systems Ltd PERS.NS:

• RECOMMENDED FINAL DIVIDEND OF 18 RUPEES PER SHARE

Source text: ID:nNSE1cdpX3

Further company coverage: PERS.NS

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April 9 (Reuters) - Persistent Systems Ltd PERS.NS:

• LAUNCHES MERCHANT RISK MANAGEMENT SOLUTION POWERED BY DATABRICKS AI

Source text: ID:nnAZN4SPW9G

Further company coverage: PERS.NS

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March 23 (Reuters) - Persistent Systems Ltd PERS.NS:

• PERSISTENT APPOINTS RUCHI KULHARI AS EXECUTIVE VICE PRESIDENT - ENTERPRISE STRATEGY & EXECUTION

Source text: ID:nPn97mJyxa

Further company coverage: PERS.NS

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March 17 (Reuters) - Persistent Systems Ltd PERS.NS:

• LAUNCHES AI-POWERED GENERATIVE MOLECULES AND VIRTUAL SCREENING SOLUTION POWERED BY NVIDIA

Further company coverage: PERS.NS

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March 5 (Reuters) - Persistent Systems Ltd PERS.NS:

• LAUNCHES MELBOURNE INNOVATION CENTER FOR AI-DRIVEN ENTERPRISE MODERNIZATION

Source text: ID:nBSEblQ0Rm

Further company coverage: PERS.NS

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Feb 24 (Reuters) - Persistent Systems Ltd PERS.NS:

• PERSISTENT SYSTEMS - WE CONTINUALLY EXPLORE INORGANIC GROWTH OPPORTUNITIES

• PERSISTENT SYSTEMS - CURRENTLY THERE IS NO IMMINENT M&A TRANSACTION THAT REQUIRES DISCLOSURE

Source text: ID:nBSE9nR5S8

Further company coverage: PERS.NS

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Feb 17 (Reuters) - NVIDIA Corp NVDA.O:

• NVIDIA: TECH MAHINDRA DEPLOYING LARGE TELCO MODEL TO POWER AUTONOMOUS NETWORK OPERATIONS USING NVIDIA NIM

• NVIDIA: PERSISTENT ACCELERATES AI‑DRIVEN MOLECULAR DISCOVERY WITH NVIDIA BIONEMO AND NEMO AGENT TOOLKIT

• NVIDIA: INFOSYS BUILDS AN ENTERPRISE-GRADE CODING SMALL LANGUAGE MODEL WITH NVIDIA AI ENTERPRISE

• NVIDIA: RELIANCE NEW ENERGY EXPANDS COLLABORATION WITH CO & SIEMENS BY COMBINING SIEMENS’ DIGITAL TWIN TECHNOLOGY WITH CO'S OMNIVERSE LIBRARIES

• NVIDIA: COLLABORATING WITH NEXT‑GENERATION CLOUD PROVIDERS YOTTA, L&T AND E2E NETWORKS

• NVIDIA: DEVELOPERS BUILDING SOVEREIGN AI SYSTEMS CAN ACCESS NVIDIA NEMOTRON & NEMO TODAY

• NVIDIA: TATA CONSULTING ENGINEERS LAUNCHES COGNITIVE TWIN PLATFORM, BUILT ON NVIDIA OMNIVERSE

• NVIDIA: TO OFFER ANUSANDHAN NATIONAL RESEARCH FOUNDATION GRANTEE INSTITUTIONS COMPLIMENTARY ACCESS TO NVIDIA AI ENTERPRISE SOFTWARE

• NVIDIA: PARTNERING WITH VENTURE CAPITAL FIRMS INCLUDING PEAK XV, ELEVATION CAPITAL, ACCEL INDIA & OTHERS TO IDENTIFY & FUND AI STARTUPS

Source text: [ID:]

Further company coverage: NVDA.O

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** The recent correction in India's information technology sector presents an added buying opportunity, according to brokerage CLSA

** Indian IT stocks .NIFTYIT lost 12.5% in 2025, emerging as the biggest drag in benchmark indexes, which underperformed Asian and emerging-market peers

** The decline was triggered by record foreign outflows of $8.5 billion from the sector, muted corporate earnings and persistent weakness in U.S. client spending, the sector's primary revenue engine

** The pressure has intensified in 2026, with the IT index down 7% so far, amid rising concerns that advances in artificial intelligence, including new tools from U.S.-based Anthropic, could sharply compress software development cycles

** CLSA, however, downplays near-term disruption risks, arguing that enterprise technology ecosystems often take years to meaningfully adapt to new waves of innovation

** While the sector has weathered multiple disruptive narratives in the past, earnings have rarely suffered lasting damage, according to the brokerage

** CLSA favours mid-tier players Persistent Systems PERS.NS and Coforge COFO.NS, saying their agility positions them to capture emerging profit pools in the next technology cycle

(Reporting by Bharath Rajeswaran in Bengaluru)

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Feb 4 (Reuters) - Shares of Indian IT exporters .NIFTYIT slumped 6% on Wednesday, tracking losses in global software stocks, after AI developer Anthropic launched new tools that heightened concerns over AI-driven disruption in the data and professional services industry.

Anthropic launched plug-ins for its Claude Cowork agent on Friday that would automate tasks across legal, sales, marketing and data analysis, triggering a significant selloff among U.S. and European data analytics, professional services and software companies.

The Indian IT sub-index joined the rout on Wednesday and was set for its worst day since May 2022. All 10 of its constituents were in losses, led by a 7% drop in software services exporter Persistent Systems PERS.NS.

Heavyweights TCS TCS.NS and Infosys INFY.NS were down 5.2% and 5.8%, respectively, while Wipro WIPR.NS fell nearly 4%.

(Reporting by Kashish Tandon in Bengaluru; Editing by Nivedita Bhattacharjee)

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** Shares of India's Persistent Systems jump 0.66% to 6267.50 rupees

** Brokerage Macquarie ("outperform", hikes PT to 7750 rupees from 7450 rupees earlier) says co delivered solid beat in Q3, expects margin expansion through FY26 from sales and marketing leverage

** Citi Research (raises PT 5455 rupees from 5330 rupees)says co continues to grow well ahead of industry, but flags limited upside given its premium valuation

** On Tuesday, IT services co posted ~18% y/y growth in quarterly revenue to 37.78 bln rupees ($412.40 mln), profit up ~15% y/y

** PERS rated "hold" on avg by 35 analysts covering it; median PT at 6368 rupees- data compiled by LSEG

** 207,358 shares traded on the day, ~50% the 30-day avg of 407,379 shares

** PERS was down ~3.4% in 2025; PERS flat YTD

($1 = 91.6100 Indian rupees)

(Reporting by Komal Salecha and Surbhi Misra in Bengaluru)

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By Bharath Rajeswaran and Sai Ishwarbharath B

Jan 8 (Reuters) - India's information technology firms are expected to report another muted quarter, as tepid demand in the U.S. and holiday-period client shutdowns continue to weigh on tech spending, nine brokerages said ahead of earnings.

Brokerages expect the top six IT firms by revenue to post about 4% year-on-year revenue growth and a 5% rise in profit for the December quarter on average, reflecting prolonged demand softness, compared with 6.5% revenue growth in the September quarter.

Indian software exporters last reported double-digit revenue growth in the March quarter of 2023, when digital transformation, cloud adoption and remote-work demand surged in the post-pandemic period.

The broader $283 billion Indian IT industry continues to face macro headwinds, including uncertainty over U.S. tariffs, challenges from proposed $100,000 visa fees, and subdued client spending on concerns about growth in the world's largest economy.

India's IT companies earn a significant share of their revenue from the United States, making the world's largest economy crucial for the sector.

Sector bellwether Accenture's ACN.N recent earnings beat Wall Street expectations on AI-led demand, though its unchanged growth outlook underscores the cautious near-term environment.

Although India has no pure-play AI firms, IT companies are beginning to shape AI strategies through acquisitions and partnerships. Brokerages expect AI momentum to build over the next six months and demand to pick up into 2026.

"Clients remain cautious about committing incremental spending to large programs amid macro and tariff uncertainty and a new tech cycle," said Abhishek Pathak, research analyst at Motilal Oswal Financial Services.

U.S. tariff uncertainty, visa worries and weak spending drove record foreign outflows of $8.5 billion from IT stocks in 2025, nearly half of total foreign exits from Indian equities.

The Nifty IT index .NIFTYIT fell 12.6% in 2025, making it the worst-performing sector as Indian markets lagged Asian and emerging-market peers.

Tata Consultancy Services TCS.NS, the country's largest IT firm, will kick off the earnings season on January 12. Its revenue is expected to rise about 4.2% year-on-year, slower than the 5.6% growth reported last year.

Infosys INFY.NS and HCLTech HCLT.NS are forecast to report year-on-year revenue growth of about 8.1% and 4.6%, respectively, compared with 7.6% and 5.1% in the year-ago period.

Most brokerages do not expect HCLTech to upgrade its fiscal 2026 annual revenue forecast of 2%–3%, or Infosys to raise its forecast of 3%–5%.

Earnings across domestic equities are expected to improve in the December quarter on tax cuts, policy easing, stable growth and benign inflation, even as the period remains structurally weak for IT firms.

Fewer working days due to global client holidays weigh on billing and revenue, while brokerages flag margin pressure from furloughs and wage hikes at firms such as TCS and Wipro WIPR.NS.

However, resilience in the BFSI (banking, financial services and insurance) segment, deal ramp-ups, early signs of artificial intelligence strategy formation and rupee depreciation could offer support by mid-2026, six brokerages said.

(Reporting by Bharath Rajeswaran and Sai Ishwarbharath B in Bengaluru; Editing by Sherry Jacob-Phillips)

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** Shares of Persistent Systems PERS.NS fall 7% to 5,216 rupees, marking their steepest intraday percentage loss in four months

** Stock top loser in Nifty IT index .NIFTYIT, which is down 1.2%

** Co posts higher quarterly profit, but analysts flag macro headwinds that could hit future growth

** Macquarie and HSBC say EBIT margin, at 15.5%, falls short of expectations

** Macro uncertainty is slowing down client decision-making, especially in healthcare - Nomura

** HSBC maintains "hold" rating; sets TP at 6,000 rupees, implying upside of 7% from last close

** Macquarie retains "Outperform"; TP at 7,330 rupees, upside of 30.7%

** Nomura keeps "Neutral"; cuts TP to 5,510 from 5,700 rupees

** PERS rated "Hold" on average; median TP 5,836 rupees – data compiled by LSEG

** Stock down 19% YTD

(Reporting by Rudra Pratap Singh in Bengaluru)

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** Centrum initiates coverage on Indian IT services provider Persistent Systems PERS.NS with 'buy'; sets PT at 7,245 rupees

** PT implies upside of ~21% to current stock price of 5,997 rupees; PERS flat on the day

** Centrum says, PERS' 4-year revenue CAGR of 25.6% from FY21-FY25 significantly outpaces industry averages

** Adds, recent deal wins provide strong revenue and operating margin growth visibility, while sales mix remains well-diversified

** Co's strategic positioning at the forefront of the generative AI wave should drive accelerated deal flow and strengthen client partnerships- Centrum

** According to LSEG data, PERS rated 'hold' on avg by 32 analysts; median PT at 5,620 rupees - implying a downside of 6.3%

(Reporting by Ananta Agarwal in Bengaluru)

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