Persistent to hit USD 1 bln annual revenue rate in FY23, to hire 3,000 freshers

Mid-tier IT company Persistent Systems is set to achieve its long-held aspiration of the yearly revenue rate touching USD 1 billion by the September 2023 quarter, a top official said on Thursday.

The Pune-headquartered company posted a 42 per cent jump in revenue to USD 217 million in the March quarter, when it witnessed a 45.9 per cent growth in net profit at Rs 200.9 crore. The company had first spoken about the USD 1 billion annual revenue aspiration a few years ago when it was clocking revenues of about USD 400 million, and made it clear that it will be doing acquisitions to achieve the goal.

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It can be noted that since the beginning of the pandemic, demand for digitisation has helped IT companies post handsome growths. Persistent’s chief executive Sandeep Kalra told PTI that the company now looking at realising the USD 1 billion aspiration in “four to six quarters” from now, which means it will be hitting the USD 250 million per quarter revenue by September.

Kalra said only USD 4.7 million came from the three acquisitions tied up by the company in the last two quarters, and added that most of the revenue is organic one. When asked about acquisitions strategy going forward, he said the company will focus on integrating and assimilating the companies acquired with its operations. Kalra said it closed FY22 with a Total Contract Value (TCV) of USD 1.22 billion, which has the annual contract value potential of USD 943 million, while in the March quarter it had a TCV of USD 361 million or an annual contract value of USD 262 million.

Referring to positive conversations with the clients in meetings held over the last 3-4 weeks, Kalra said the deal pipeline is very strong and things are “looking well” for the mid to long term. The company’s chief financial officer Sunil Sapre said the biggest headwind going forward is supply side constraints, which are resulting in a war for talent. Kalra said the turbulence will continue for 2-3 quarters more and the company would like to decrease its attrition level further from the elevated levels of over 26 per cent in March.

It is taking specific efforts to reduce the attrition like opening delivery centres at places where the staff would like it to be, Sapre said, adding that it is thinking of having a facility in Indore or satellite centres in Bengaluru. The company is targeting to hire at least 3,000 freshers in FY23 because of the high demand, Kalra said, adding that lately there has been a surge in hiring of freshers for the company. The scrip of Persistent was trading 4.93 per cent up at Rs 4,277.95 apiece on the BSE at 1341 hrs as against a 1.28 per cent gain on the benchmark.