Stockrabit · Analysts
Questions across 2 calls

Kawaljeet Saluja

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Persistent Systems Limited

Persistent Systems Limited CC-Jun24.pdf · 2024-07-19
Hi, Sandeep. Fabulous revenue growth performance. Congratulations! You know let's talk about something which is a little bit what I would say tad disappointing, which is on profitability. Now, if you look at the underlying EBIT in the quarter, Sandeep, it stands at 9.5% if you remove those you know, earnout provision reversals, etc., and this is even before wage revision. Now I'm just trying to understand what are the nature of contracts actually, which has brought down the underlying EBIT margin to 9.5%. T ypically, strong revenue growth is associated with margin improvement but of course, I understand that there are idiosyncratic contracts. I'm just trying to understand the true profitability of the new incremental business that you are winning.
No, I t ake your point, Sandeep at the end of the day, you have to take a portfolio call, but just persisting on this you know, see, essentially some of the things on which you're getting benefit, like, let's say, reversal of earnout provision. It would not be there next year. Right? So, I'm just trying to understand what's the true underlying nature of profitability ? I mean, you know, you've basically stopped, let's say te nure-based incentive plan on stock options for employees. So, again, there's a lumpy tailwind, right , which will not recur. I'm just trying to understand what are the true underlying profitability in FY25, as such ? I understand the call on the business and portfolio.
Persistent Systems Limited CC-Sep23.pdf · 2023-10-19
Yeah, hi. Thanks a lot. And, congratulations on a reasonably good quarter. Couple of questions. First is, what direction gives you comfort on improvement in profitability, let’s say over the medium term, given the fact that, say, in FY24 you struggle to expand your margins? And you know, the labour market and this year has been as benign as it can get. And you have also consumed a fair bit of the, so called, perceived lever. So, any direction you want to give to tha t comfort on profitability improvement, that’s the first question.
Just indulge me a little bit Sandeep over here. Let’s say, you never get a perfect year. Every year there will be some challenge or th e other, right? you never get a perfect year. Yeah, there is a sales and marketing leverage; I take your point. But in your view, is that enough?