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Shares of IT service provider Persistent Systems have given multibagger returns as it has surged over 140% this year (year-to-date) so far whereas, the IT scrip has gained nearly 180% in a year's period. Brokerage and research firm Emkay has a ‘Buy’ rating on the multibagger stock.

Persistent Systems provides digital engineering and data and artificial intelligence products to the software, banking, financial services and healthcare sectors.

The brokerage said that the company has entered into an agreement to acquire Software Corporation International (SCI) and its affiliate Fusion360 LLC for a cash consideration of $53 million. It has also signed an agreement to buy certain assets from Shree Partners LLC USA and business from its Indian subsidiary Shree Infosoft Pvt. Ltd. for a cash consideration of $6.87 million.

SCI brings domain consulting capabilities and specializes in payments solutions, integration and support services for leading US banks. “The deals should strengthen PSYS’s (Persistent Systems) BFSI/Payment and cloud capabilities. The acquisition of SCI and Fusion360 will help PSYS take advantage of the acceleration in demand for payments modernization. Cross-selling opportunities among the existing clients and access to marquee logos augur well for revenue growth in the medium term," Emkay said in a note.

However, given the size of the deals, the brokerage does not expect any meaningful revision to its earnings estimates. It has a Buy rating on the stock with a target price of 3,700 per share.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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