Persistent Systems shares plunge over 9% post Q1; should you buy now?

Persistent Systems’ share price witnessed a sharp decline of over 9% in intraday trading on the BSE on Thursday, July 24, following the release of its Q1 FY26 earnings. The stock opened at ₹5,541.50, down from its previous close of ₹5,605.35, and plunged to an intraday low of ₹5,084.15. By mid-morning, it was trading around ₹5,149.25, reflecting an 8.14% drop. Despite reporting strong financial results, investor sentiment remained cautious, possibly due to the stock’s rich valuation and bearish technical signals.

In Q1, Persistent Systems reported a consolidated net profit of ₹424.94 crore, marking a 38.7% year-on-year (YoY) and 7.4% quarter-on-quarter (QoQ) rise. Revenue also rose by 21.8% YoY and 2.8% QoQ to ₹3,333.59 crore. EBIT grew by 34.8% YoY to ₹517.81 crore, while EBIT margin improved to 15.5% from 14% in the same quarter last year. The company secured $520.8 million in total contract value (TCV) and $385.3 million in annual contract value (ACV), indicating robust order momentum.

Despite the solid numbers, Persistent’s stock has fallen nearly 20% in 2025 so far and about 15% in July alone, breaking a two-month winning streak. Over the past year, the stock has gained just 7%, with a 52-week low of ₹4,163.80 and a high of ₹6,788.80. Analysts have offered mixed views on the stock. While Motilal Oswal maintained a 'buy' rating with a target of ₹6,800, and JM Financial also issued a 'buy' with a slightly reduced target of ₹6,720, ICICI Securities recommended a 'reduce' with a target of ₹5,130 due to valuation concerns.

Technical analysts are also cautious. According to Jigar S. Patel from Anand Rathi, the stock recently broke the neckline of a “head-and-shoulders” pattern, which typically signals a bearish trend. This comes after the stock rallied more than 50% since April 2025. Overall, while Persistent Systems continues to deliver operationally, its current price levels and technical indicators suggest a need for cautious optimism among investors.