Persistent Systems Q1 results: Profit drops 9% despite revenue growth; posts record deal wins

Persistent Systems reported an 8.7% sequential decline in net profit for the first quarter of FY27, while revenue rose on the back of continued deal momentum and strong client spending, according to an exchange filing on Sunday, August 3.

The IT services company posted a net profit of ₹483 crore for the June quarter, compared with ₹529 crore in the previous quarter. Revenue increased 6% quarter-on-quarter to ₹4,303 crore from ₹4,056 crore.

In dollar terms, revenue rose 3.8% sequentially to $452.4 million from $436 million in the March quarter.

Operating performance softened during the quarter, with earnings before interest and tax (EBIT) declining 12% quarter-on-quarter to ₹581.5 crore from ₹659 crore. The EBIT margin stood at 13.5%, compared with 16.2% in the preceding quarter.

In the exchange filing, Chief Executive Officer and Executive Director Sandeep Kalra said the company recorded its 25th consecutive quarter of revenue growth, delivering 3.8% sequential and 16.1% year-on-year revenue growth.

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Kalra said the company also achieved a record quarterly total contract value (TCV) of $1.15 billion, reflecting continued momentum in larger client engagements, including a 6.5-year strategic services agreement with a leading global technology company valued at more than $650 million.

Persistent also said it has signed a Business Combination Agreement with Nagarro, a Europe-based digital engineering company listed on the Frankfurt Stock Exchange, in line with its merger and acquisition strategy to strengthen its capabilities, expand its geographic footprint and deepen industry coverage.

The company said the open offer document has been submitted to Germany's financial regulator BaFin for review, while an application has been filed with the Reserve Bank of India (RBI) for approval. Regulatory filings related to foreign direct investment and merger control are underway across jurisdictions.

Persistent added that it has secured a bridge loan commitment and is arranging long-term financing to replace it. The company expects the transaction to close in Q4 CY2026 or Q1 CY2027, subject to regulatory approvals and customary closing conditions, the exchange filing said.

Looking ahead, Kalra said enterprises are increasingly focused on scaling artificial intelligence across their businesses. Persistent will continue investing in its AI-led platforms and enterprise capabilities to help clients build intelligent enterprises, reshape operating models and realise greater value from AI, according to the filing.

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