 "Persistent Systems targets to double revenues to $2 bn in 4 years")
Mid-tier IT company Persistent Systems on Thursday said it is targeting to double the revenues in four years to USD 2 billion.
"We will aim to be a USD 2 billion revenue company in four years," its chief executive Sandeep Kalra told PTI, a day after the company achieved its USD 1 billion in annualised revenue by posting a 40 per cent rise in the topline to USD 255 million in the September quarter.
Kalra said the company's quarterly revenues stood at USD 125 million three years ago, and the rate of doubling will take longer at four years now, given that it will be a bigger size.
In the results for the September quarter declared on Wednesday, the Pune-headquartered company posted a 51.6 per cent jump in revenues in the rupee terms to Rs 2,048 crore and a 36 per cent rise in the post-tax net at Rs 220 crore.
Its chief financial officer Sunil Sapre said the demand for services continued to be robust, the pipeline is also strong and the company will target sustaining the momentum. It reported a total contract value of USD 367 million in the quarter.
Uncertainties on the macroeconomic front like recession and inflation in the US, which contributes three-fourths of its revenues, and the geopolitical tensions in Europe are making clients cautious and wary about long-term commitments, he noted.
However, even as it faces headwinds, the company can sustain the momentum, given its scale and relationships, and by being creative in its approach, Sapre said, pointing to how opportunities are developing on the healthcare front.
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He said cost optimisation is a key on clients' minds in the conversations at present, which the company has achieved by higher offshoring of work.
Kalra said the Indian IT sector always emerges as the winner, when it comes to periods of softness when there are such demands from the clients on the cost front.
The company reported an expansion in the operating profit margin to 18 per cent during the reporting quarter against 16.6 per cent in the year-ago period and 17.7 per cent in the preceding June quarter.
When asked if it will be able to sustain the margins, Sapre said that bagging the growth opportunities is more important for the company and it will do that without compromising on profitability.
At present, the margin levers working in favour of the company include currency tailwinds, a higher mix of low-cost freshers and operating expenses, he said, adding that the number will get a push as the higher number of freshers hired over the last two quarters finish their training and join projects, leading to higher utilisation.
In the September quarter, it delivered a salary hike to all its employees and added 838 employees on a net basis.
The attrition has plateaued even though pressure on talent continues in certain areas, Sapre said, adding that it will cool to 20 per cent by the March quarter.
The company scrip was trading 0.12 per cent up at Rs 3,668.10 apiece on the BSE at 1059 hrs against a 0.15 per cent correction on the benchmark.
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