Persistent Systems share price crashes 5% after Q3 results; should you buy, sell, or hold?

Persistent Systems share price crashed 5% in morning trade on the BSE on Wednesday, January 21, a day after the IT stock released its December quarter (Q3) results. Persistent Systems shares opened at ₹6,335 against their previous close of ₹6,343.20 and dropped 5% to an intraday low of ₹6,026.

If the stock ends lower, it will be its second consecutive day of losses. In the previous session, the IT stock fell by 1.4%.

Persistent Systems Q3 results

After market hours on Tuesday, January 20, Persistent Systems reported a 17.3% year-on-year (YoY) and 4% quarter-on-quarter (QoQ) rise in consolidated revenue to $422.5 million for the December quarter of the current financial year (Q3FY26). In constant currency (CC), revenue grew by 17.3% YoY and 4.1% QoQ.

Profit grew by 17.8% YoY but declined 6.8% QoQ to ₹439.45 crore, due to a one-time impact of new labour codes.

The board of directors also declared an interim dividend of ₹22 per share on the face value of ₹5 each for FY26. The record date for the interim dividend is Tuesday, January 27, 2026, and it will be paid within 30 days of its declaration.

“We delivered sustained performance, achieving our 23rd sequential quarter of revenue growth with 4% quarter-on-quarter and 17.3% year-on-year growth. This was accompanied by an EBIT margin of 16.7%, excluding a one-time impact of nearly 2.3% arising from the New Labour Codes. In line with this performance, we are declaring an interim dividend of ₹22 per share," said Sandeep Kalra, Chief Executive Officer and Executive Director, Persistent.

Persistent Systems share price trend

Persistent Systems shares have given multibagger returns of over 180% over the last three years, according to the BSE data.

Over a one-year period, the stock delivered a muted 3% return, compared to an 8% rise in the equity benchmark, the Sensex.

However, in the last three months, the stock has gained 5%, while the Sensex has declined by 3%.

The stock hit a 52-week high of ₹6,597 on December 23 after hitting a 52-week low of ₹4,163.80 on April 7 last year.

Is it the right time to buy Persistent Systems shares?

According to brokerage firm Motilal Oswal Financial Services, Persistent remains a buy candidate after the Q3 results.

Motilal has a target price of ₹8,500 for the stock, implying a 34% upside.

The brokerage firm projects an 18% USD revenue CAGR over FY25-27 for the company, which, combined with margin expansion, could result in nearly 28%+ EPS CAGR.

"This places the company in a league of its own as a diversified product engineering and IT services player," said Motilal Oswal.

Motilal Oswal has raised its estimates by 3-4%, reflecting strong margin gains in Q3 and continued revenue momentum.

"We factor in margin expansion of 160bp over FY26E (and another 50bp by FY27E). Owing to its superior earnings growth trajectory, on a PEG basis, we believe the valuation still has room for upside. We value the stock at 45 times FY28E EPS," said Motilal Oswal.

On the other hand, brokerage firm ICICI Securities has a 'hold' call on the stock with a target price of ₹6,440.

ICICI Securities highlighted that Persistent Systems is seeing strong traction in AI-led application modernisation and productivity improvement across workflows.

The company is also witnessing a pickup in client interest in application and data modernisation in BFSI and healthcare verticals, ICICI Securities said.

"Robust deal win momentum and strong execution on driving AI-led productivity improvement reflected in margin tailwind of 150bps in Q3FY26 and rise in revenue per employee by 8.9% YoY provides comfort of sustenance of industry-leading revenue growth and consistent margin improvement," said ICICI Securities.

"We tweak FY27–28E EPS, retain one-year forward P/E multiple at 40 times to arrive at target price of ₹6,440," said ICICI Securities.

Technical experts appear slightly cautious about the stock at the current juncture.

Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, pointed out that the stock is currently consolidating within a broad range of ₹6,000–6,600.

Patel said that the DMI negative line remains above 25 while ADX is below 20, indicating weak trend strength and a range-bound structure. Hence, sideways movement is likely to persist within the ₹6,000–6,600 zone. However, he added that a decisive daily close below ₹6,000 could open the door to downside risk towards ₹5,800.

Read all market-related news here

Read more stories by Nishant Kumar

Disclaimer: This story is for educational purposes only. 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.