Persistent Systems Reports Decline in Net Profit, Acquires Nagarro for EUR 1.4 Billion

Persistent Systems has reported an 8.7% sequential decline in net profit to Rs 483.04 crore for the June quarter. The company attributed this quarterly decline to forex losses. The firm’s profit margin declined to 11.2 percentage points (pps) from 13.1% in the previous quarter. EBIT rose 4.2% quarter-on-quarter to Rs 686.88 crore, but EBIT margin was down 16% from 16.3% in the previous quarter. Persistent revenues grew 6.1% to Rs 4,303.23 crore. In dollar terms, Persistent’s revenue grew 3.8% to $ 452.4 million. Constant-currency growth was 4.1%. The company said it had its highest-ever quarterly Total Contract Value (TCV) of $ 1.15 billion, driven by large deal wins. The order booking in Annual Contract Value (ACV) was $ 536.8 million. Large deal wins included a 6.5-year strategic services agreement with a leading global technology company having a TCV of $650 million. Persistent’s software, hitech and emerging industry vertical revenue was $184 million, or 40.70% of revenue. BFSI revenue was $153 million (34% revenue share), while the healthcare and life sciences segment revenue was $114 million (25.3% share). The US accounted for 79.1% of revenues, followed by India at 9.8% and Europe at 8.5% Sandeep Kalra, CEO and executive director of Persistent, said the company has signed a deal to acquire the European digital engineering company Nagarro, listed on the Frankfurt Stock Exchange. The company said the open offer document and application have been submitted to regulators, and regulatory filings for FDI and merger control were in progress across jurisdictions. The bridge loan commitment is in place, and they are working on replacing it with long-term financing. Persistent has secured a EUR 1.4 billion (Rs 15,000 crore) bridge loan from a consortium of banks led by Barclays for this acquisition. The company expects to close the deal by Q4 of CY26 or Q1 of CY27. Kalra said this was in line with the M&A strategy to strengthen capabilities and expand geographic footprint and industry coverage, to create an AI-led global engineering powerhouse. The combined entity will have a revenue run rate of $ 2.9 billion and 46,000 professionals. “As enterprises look to scale AI across their businesses , the differentiator will not be the model itself, but the ability to create a unified enterprise context from business logic, data and enterprise experience embedded across the organisation. Persistent will continue to invest in AI-driven platforms to help clients build more intelligent enterprises, reshape their operating models and realise greater value from AI,” Kalra said. The Naggaro deal is expected to give the company a more balanced geographic mix, with North America at 62%, Europe at 22% and Rest of the World, including the Middle East and Asia, at 16% and strengthen the company’s nearshore Europe delivery footprint, across Romania, Portugal, Hungary and Poland. Persistent’s employee strength grew by 1,138 to 28,640, with utilisation reducing to 86.5% from 88% in the previous quarter.