Persistent Systems falls 11% on weak March quarter outlook

Persistent Systems has dipped 11% to Rs 697 on the BSE after the information technology (IT) company said it is expecting a decline in IP revenues in fourth quarter of current fiscal (Q4FY18), which will impact revenue and EBIDTA (earnings before interest, taxes, depreciation, and amortization) margin for the quarter.

The company said it expect the sequential drop in IP revenues to be about US$ 8 million for Q4FY18.

“IP revenues have seasonality and tend to fluctuate on a sequential quarter-on-quarter basis. While we continue to see good overall growth for our IP revenue portfolio, relative quarter-on-quarter decline follows a strong Q3 FY18 (last quarter of calendar year 2017),” Persistent Systems said in a regulatory filing.

Company's focus on data, digital and IoT is aligned with customers as they implement their transformation roadmap as evidenced by a strong pipeline of business opportunities. Overall, the business outlook for the upcoming year (FY 2018-19) remains strong with revenue growth expected to exceed NASSCOM guidance for the industry, it added.

In past three months, Persistent Systems had outperformed the market by gaining 15% as compared to 2% decline in the S&P BSE Sensex till Tuesday. It hit a 52-week high of Rs 878 on February 27, 2018 on the BSE in intra-day trade.

At 11:00 am; the stock trading 10.5% lower at Rs 700 as compared to 0.61% decline in the benchmark index. The trading volumes on the counter more than doubled with a combined 662,300 shares changed hands on the BSE and NSE so far.