Persistent Systems’ share price crashed as much as 9% to hit a 52-week low of ₹4,404 in morning trade on Monday, 29 June, amid widespread selling in the IT sector. Persistent Systems shares opened at ₹4,500 against their previous close of ₹4,840.45 and plunged 9% to their one-year low of ₹4,404. The BSE Information Technology index declined 1%.
Persistent Systems shares declined even as the company announced it will pay €81 per share to acquire Nagarro SE for roughly $1.3 billion. The deal is expected to close by March 2027, after which the combined entity will operate as the Persistent-Nagarro Group.
This is Persistent’s biggest acquisition since listing in 2010 and could help it become the country’s seventh-largest IT services company, surpassing Mphasis and Coforge.
Additionally, Persistent announced a 6.5-year strategic services agreement with a global technology leader, resulting in net new TCV of more than $650 million and ACV of more than $125 million.
The stock has crashed 29% year-to-date (YTD), in sync with the sectoral index, BSE IT, which is also down 28% YTD. On a monthly scale, Persistent’s shares are down 15% so far in June.
Is Persistent Systems a stock to buy?
Most brokerage firms remain positive about the stock for the long term after the company’s announcement of acquiring Nagarro.
As brokerage firm Motilal Oswal highlighted, Nagarro will add nearly $1.1 billion in revenue, bringing the combined entity to nearly $2.9 billion and nearly 46,000 employees across more than 40 countries. It will strengthen Persistent’s presence in Europe and broaden its service portfolio.
“We view this acquisition as addressing Persistent’s long-standing objective of building scale in Europe, broadening its vertical mix, and creating cross-sell opportunities with limited customer overlap. The acquisition also appears priced at 9.1 times EV/EBITDA, which we believe is a reasonable valuation for a business of Nagarro’s scale,” said Motilal Oswal.
However, Motilal added that it remains to be seen how much value Persistent can extract from the acquisition through integration and cross-selling.
“While management expects margins to remain broadly stable, we would await greater clarity on integration, cost synergies, and the path toward margin convergence, given Nagarro’s lower profitability. Execution over the next few quarters will remain the key monitorable,” said Motilal.
Motilal continues to value the stock at 34 times FY28E EPS and reiterates its buy rating, with a target price of ₹6,200, implying a 28% upside.
Another brokerage firm, JM Financial, has maintained an ‘add’ view on the stock but trimmed the target price to ₹5,095 from ₹5,660.
JM Financial underscored that the deal is valued at nearly 14 times EPS, based on CY27 Nagarro’s consensus estimates. It would annually add nearly 70% to Persistent’s revenue post-closure.
“We are revising FY27E-FY29E EPS marginally, given a large deal ramp-up (not incorporating Nagarro acquisition). However, we are lowering the target multiple to 30 times FY28E EPS (earlier 34 times), factoring in the integration risk. The target price thus stands revised to ₹5,095 versus earlier ₹5,660. We maintain an ‘add’. Persistent is trading at nearly 28 times FY28E consensus EPS,” said JM Financial.
Persistent Systems shares: What tech charts indicate?
According to Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, the Persistent Systems share price is currently trading below all its key moving averages, indicating a weak technical structure.
Patel underscored that price is hovering near a major support zone established in 2024, making this an important level to watch. On the daily chart, the MACD remains below the zero line, reflecting persistent bearish momentum.
“Immediate support is placed in the ₹4,300–4,400 zone, while resistance is seen at ₹4,600–4,700. Given the prevailing trend, a wait-and-watch approach is advisable. A sustained base formation around the support zone would be the first sign of improving strength before considering fresh buying opportunities,” said Patel.
According to Vipin Kumar, AVP- Equity Research and PMS at Globe Capital Market, Persistent Systems has been in a consolidation phase over the last two years, with multiple supports around the ₹4,100– ₹4,350 spot zone.
Following a gap-down opening today, it found support around these levels.
Going forward, Kumar expects the stock to stabilise around this support zone. However, a decisive fall below ₹4,100 could shift the long-term trend into negative territory, said Kumar.
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Disclaimer: This story is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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