Important Points for the case

Y-0 Y-1 Y-2 Y-3 Y-4 Y-5

A (MGN) 50000 50000 50000 50000 50000 50000
B 50000 50000 50000 50000 50000 50000
CONV DEBT 50000
EQUITY 100000 100000 100000 100000 100000 150000

CONV DEBT @ Y-5 50000 50000 50000 50000

A 5000 5000 5000 5000 5000 5000

B 5000 5000 5000 5000 5000 5000 <== 1/3
CONV DEBT 5000
BASIC 10000 10000 10000 10000 10000 15000
DILUTED 10000 15000 15000 15000 15000 15000

5000 CONVERTIBLE SECURITIES

CONV DEBT
CONV PREF
ESOP

BUSINESS FORECASTING
REVENUE = PRICE * QTY

ASP Y/Y, CAGR

ALTO
NO OF CARS SOLD
CORRELATION TO GDP GROWTH
SWIFT
PV

BALENO
SUZUKI

CV

PERSISTENT
EXAMPLE
HOSPITAL IN USA
 MGMT SOFTWARE

VENDOR LIKE PERSISTENT

INTELLECTUL PROP, NOT MONETISABLE

PAY FOR THE EFFORT REQ TO MAKE THE SOFTWARE

EFFORT BILLING RATE
DEVELOPER MONTHS PERSON MONTHS USD/PPM
ONSITE (GDC) 1 10 10 10000
OFFSHORE 10 10 100 2500

REVENUE MODEL ANALYSIS

BILLING RATE (USD/PPM)

16987
x
GDC MONTHS BILLED
31.50% 9305 83.1%

SERVICES BILLING RATE (USD/PPM)

79.60% 4428
INDIA x
48.10% MONTHS BILLED
TOTAL SALES 54516 77.8%

BILLING RATE (USD/PPM)

????
IP LED x
20.40% MONTHS BILLED
17954

ONSITE
GENERAL MOTOR
PERSISTENT IT SERVICES OFFSHORE
MICROSOFT OFFSHORE
IP LED
ION TO GDP GROWTH
SALES
100000
250000
350000 USD
75 INR/USD
26.25 INR MN

BILLABLE PERSON MONTH PM PEOPLE

11202 SERVICES GDC 11202 GDC 934
INDIA 70085 INDIA 5,840
IP LED 17954 IP LED 1,496
8,270 <== TOTAL BILLABLE DE
TRAINEE 1,565 <==NON BILLABLE
BILLABLE PERSON MONTH TECH 9,835
70085
TECH 9835
SALES 263
OTHERS 534
10632
<== TOTAL BILLABLE DEVELOPERS
<==NON BILLABLE
hc 300 <== land + const + etc
1 2 b/s t = 0
phasing % 50% 50% debt 71.25 cash 150
equity 78.75 <==
hc 150 150
d/e 1 tl & e 150 ta 150
int 10% 75*10% = 7.5 check 0
b/s t = 1
debt 78.75 cash 0
1 equity 78.75 fa 150
sc 7.5
tl & e 157.5 ta 157.5
check 0
 OWNED BY SH OF A CO.
20% MINORITY SH
STANDALONE A ACQ 80% CONSOLIDATED <== INVESTOR FOCUS
A B A+B
SALES 100 10 110
COST 50 5 55
PROFIT 50 5 55 <== 50 + 5, BUT OUT 5 OF B ONLY 80%IS FOR A's SH
-1 <== PROP OF Bs PROFITS TO MINORITY SH
PROFIT 54 <== 50 + 4 (80% OF 5 OF PROFIT OF B)

20% MINORITY SH A ACQ 205

STANDALONE A ACQ 80% CONSOLIDATED D ACQ 80% STANDALONE CONSOL
A B A+B C D D+C
SALES 100 10 110 10 100 110
COST 50 5 55 5 50 55
PROFIT 50 5 55 5 50 55
MINO INT -1 -1
ASSO PRO 1
PROFIT 55 54

B IS SUBSIDIARY TO A
C IS SUBSIDIARY TO D
C IS ASSOCIATE TO A
 157.5 78.75
<== cap int
S FOR A's SH
MODEL SCHEME

REVENUE DRIVERS

IS
COST DRIVERS
CFS FCFE/FCFF

RATIOS
BS
HISTORY FORECAST
ASSET SCHEDULE IS/BS/CFS
VALUATION RELATIVE

VALUATION DCF

INT PRICE > CMP

15%+
DECISION MAKING
 EQUITY RESEARCH MODEL

PERSISTENT SYSTEMS
MIDCAP IT COMPANY LISTED IN INDIAN EXCHANGES
Persistent Systems
Template
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Year 2013 - A 2014 - A 2015 - A 2016 - A 2017 - A 2018 - A 2019 - A
Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26
2020 - A 2021 - E 2022 - E 2023 - E 2024 - E 2025 - E 2026 - E
Persistent Systems
Income Statement
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Year 2013 - A 2014 - A 2015 - A 2016 - A 2017 - A 2018 - A

Revenue from Oper 12,945 16,692 18,913 23,123 28,784 30,337

Other Income 286 310 938 773 958 1,191
Total Revenue 13,231 17,002 19,851 23,896 29,743 31,528

Employee Benefit 7,188 9,090 11,114 14,068 18,008 18,316

Cost of technical pr 536 906 1,090 1,587 1,818 3,181
COGS 7,724 9,995 12,203 15,654 19,827 21,497
Gross Profit 5,507 7,006 7,647 8,242 9,916 10,031

Other Expenses 2,094 2,553 2,806 3,554 4,304 4,153

EBITDA 3,413 4,453 4,842 4,688 5,612 5,878

Depreciation 783 1,026 939 990 1,490 1,585

EBIT 2,630 3,427 3,903 3,698 4,122 4,293

Interest Expense 0 1 3 1 1 1
EBT 2,630 3,427 3,900 3,697 4,121 4,293

Exceptional Items [Loss] - 114 -

PBT 2,630 3,427 3,900 3,697 4,007 4,293

Tax Expense 754 934 993 924 992 1,062

PAT 1,876 2,493 2,906 2,773 3,015 3,231

EPS
Basic 48.62 32.04 36.84 34.74 37.68 40.39
Diluted 46.90 31.16 36.33 34.66 37.68 40.39

Number of Shares
Basic 38.59 77.80 78.89 79.82 80.01 79.99
Diluted 40.00 80.00 80.00 80.01 80.01 79.99
Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26
2019 - E 2020 - E 2021 - E 2022 - E 2023 - E 2024 - E 2025 - E 2026 - E

33,659 35,658 28,406 33,105 38,590 44,993 52,470 61,203

877 1,324
34,536 36,982 28,406 33,105 38,590 44,993 52,470 61,203

19,250 21,556 16,709 19,743 22,856 26,741 31,131 36,344

3,490 3,919 3,034 3,587 4,151 4,858 5,655 6,602
22,740 25,475 19,742 23,330 27,008 31,598 36,786 42,946
11,796 11,507 8,663 9,775 11,582 13,395 15,684 18,258

5,357 5,260 4,356 4,980 5,861 6,801 7,950 9,262

6,439 6,246 4,308 4,795 5,721 6,594 7,734 8,995

1,573 1,660 1,413 1,349 1,244 1,302 1,392 1,558

4,866 4,587 2,895 3,446 4,477 5,291 6,343 7,437

3 63
4,863 4,523 2,895 3,446 4,477 5,291 6,343 7,437

4,863 4,523 2,895 3,446 4,477 5,291 6,343 7,437

1,347 1,121 717 854 1,109 1,311 1,571 1,842

3,517 3,403 2,178 2,593 3,368 3,981 4,771 5,595

43.99 44.38 28.40 33.81 43.93 51.92 62.23 72.97

43.99 44.38 28.40 33.81 43.93 51.92 62.23 72.97

79.95 76.68 76.68 76.68 76.68 76.68 76.68 76.68

79.95 76.68 76.68 76.68 76.68 76.68 76.68 76.68
Persistent Systems
Balance Sheet
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Year 2013 - A 2014 - A 2015 - A 2016 - A 2017 - A 2018 - A

Property, Plant and Equipm 2,800 2,785 3,021 2,968 2,768 2,581
Capital work-in-progress 1,174 307 40 24 48 8
Right of use assets
Goodwill - 23 24 78 76 77
Other Intangible assets 702 1,269 995 1,325 2,515 2,464
Intangible assets under de - - - 242 241 45
Investments 173 823 2,308 1,469 2,339 2,881
Loans 199 138 58 86 131 143
Other non-current financial assets - 13 870 922 37
Deferred tax assets (net) 190 261 244 129 306 642
Other non-current assets 524 459 81 649 72 92
Total Non Current Assets 5,763 6,066 6,784 7,840 9,421 8,969

Investments 3,116 4,071 4,661 4,914 4,500 5,916

Trade receivables 2,451 3,028 3,586 4,275 4,754 4,847
Cash and Cash equivalents 561 957 987 1,400 1,461 1,344
Other bank balances - - 526 39 48 1,070
Loans 346 410 11 9 14 7
Other current financial Asse - - 909 1,764 2,316 2,758
Current tax assets (net) - - 20 153 94 114
Other current assets 434 902 397 803 855 1,563
Total Current Assets 6,908 9,368 11,097 13,358 14,043 17,620

Total Assets 12,671 15,434 17,881 21,199 23,464 26,589

Equity share capital 400 400 800 800 800 800

Other equity 9,783 11,823 13,901 15,778 18,193 20,472
Total Equity 10,183 12,223 14,701 16,578 18,993 21,272

Borrowings 14 32 26 27 22 17
Deferred payment liabilities 559 301 - - 20 -
Provisions 80 93 116 124 146 160
Other Long Term Liabilities - 1 3 - 111 270
Total Non Current Liabilities 653 426 145 151 298 447

Trade Payables 319 434 497 1,599 1,209 1,673

Deferred Payment Liabilities - - - 4 1 -
Other Financial liabilities - - 535 535 453 396
Other Current Liabilities 468 1,140 730 1,108 1,119 1,201
Provisions 1,048 1,211 1,274 1,224 1,391 1,599
Total Current Liabilities 1,835 2,785 3,036 4,469 4,173 4,870

Total Liabilities and Shareho 12,671 15,434 17,881 21,199 23,464 26,589

Checksum (ASSETS = LIABILI - - - - - -

Balance Sheet Ratios

1 2 3 4 5
DSO 52.87 52.20 49.84 54.32 52.06
Payable Days 11.26 10.85 19.30 23.84 23.13

TR(21)= DSO(21)* REV(21)/365*2-TR(20)

Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26
2019 - A 2020 - A 2021 - E 2022 - E 2023 - E 2024 - E 2025 - E 2026 - E

2,331 2,225 1,733 1,457 1,465 1,621 1,931 2,357

12 166 166 166 166 166 166 166
- 567 567 567 567 567 567 567
81 89 89 89 89 89 89 89
1,595 1,435 1,435 1,435 1,435 1,435 1,435 1,435
304 137 137 137 137 137 137 137
4,346 4,621 4,621 4,621 4,621 4,621 4,621 4,621
164 176 176 176 176 176 176 176
344 359 359 359 359 359 359 359
405 960 960 960 960 960 960 960
68 331 331 331 331 331 331 331
9,651 11,066 10,574 10,299 10,306 10,463 10,772 11,199

3,296 5,165 5,165 5,165 5,165 5,165 5,165 5,165

4,923 5,922 3,622 8,094 6,334 11,217 10,381 15,749
1,739 1,900 4,538 4,625 7,077 7,344 9,840 10,611
4,989 2,672 2,672 2,672 2,672 2,672 2,672 2,672
8 14 14 14 14 14 14 14
2,377 2,069 2,069 2,069 2,069 2,069 2,069 2,069
185 164 164 164 164 164 164 164
1,388 1,951 1,951 1,951 1,951 1,951 1,951 1,951
18,905 19,856 20,194 24,753 25,445 30,595 32,254 38,394

28,556 30,922 30,768 35,051 35,751 41,057 43,027 49,593

791 764 764 764 764 764 764 764

22,656 23,093 24,545 26,274 28,520 31,174 34,355 38,086
23,447 23,858 25,310 27,038 29,284 31,938 35,119 38,850

12 46 46 46 46 46 46 46
- - - - - - - -
175 183 183 183 183 183 183 183
2 361 361 361 361 361 361 361
189 590 590 590 590 590 590 590

1,517 2,247 641 3,196 1,650 4,302 3,090 5,926

442 1,163 1,163 1,163 1,163 1,163 1,163 1,163
 1,122 1,320 1,320 1,320 1,320 1,320 1,320 1,320
1,764 1,611 1,611 1,611 1,611 1,611 1,611 1,611
75 132 132 132 132 132 132 132
4,920 6,474 4,868 4,868 4,868 4,868 4,868 4,868

28,556 30,922 30,768 32,496 34,742 37,396 40,578 44,308

- - - (2,555) (1,009) (3,661) (2,449) (5,285)

6 7 8 9 10 11 12 13
50.01 69.68 61.32 64.59 68.24 71.19 75.12 77.92
22.85 34.80 26.70 30.02 32.75 34.38 36.68 38.32

365*2-TR(20) TP(21)= PAYABLE DAYS(21)* CPGS(21)/365*2-TP(20)

Persistent Systems
Cash Flow Statement
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Year 2013 - A 2014 - A 2015 - A 2016 - A 2017 - A 2018 - A

Profit before tax 2,630 3,427 3,900 3,697 4,007 4,293

Adjustments for:
Interest income (93) (91) (117) (148) (145) (162)
Finance costs 0 1 3 1 1 1
Dividend income (155) (150) (233) (227) (189) (171)
Depreciation and amortization ex 783 1,026 939 990 1,490 1,585
Amortization of lease premium - - - 1 1 1
Unrealised exchange loss/ (gain) ( 9 58 (25) 68 88 (124)
Change in foreign currency transla 13 (34) (36) (37) (67) (28)
Exchange loss/ (gain) on derivative (90) 20 (11) 1 (70) 77
Exchange (gain) / loss on translati (1) 19 (11) (8) (1) (101)
Donations in kind - - - - 0 0
Bad debts 31 46 99 205 115 184
Provision for doubtful receivables 94 27 (56) (196) 26 (151)
Employee stock compensation exp 28 - 32 34 60 4
Provision for doubtful deposits a - 0 2 0 - 27
Provision for diminution in value - 0 - - 8 -
Remeasurements of the defined benef - - - 223 (61) 148
Advances written off - 4 - 30 - (18)
Excess provision in respect of earl (2) (2) (6) (0) (3) (24)
(Gain)/ loss on fair valuation of m - - - 14 (191) 19
(Profit) on sale of investments (net (13) (55) (85) (228) (94) (187)
(Profit) on sale of fixed assets (net (4) 3 (3) (9) (2) (2)
Operating profit before working capi 3,229 4,299 4,393 4,410 4,973 5,370

Movements in working capital :

(Increase) / Decrease in non-curre (82) (112) (18) 176 (50) (1)
Decrease / (Increase) in other non - - - (51) 5 (3)
(Increase) in other current financia - - - - (163) 72
(Increase) in other current assets (160) (344) (157) (1,205) (52) (696)
(Increase) in trade receivables (609) (689) (576) (645) (688) 157
(Decrease) / Increase in trade payab 130 501 202 924 (302) 306
Increase / (Decrease) in provisions 252 129 273 (57) 189 222
Working Capital Change (470) (514) (276) (857) (1,062) 56
Operating profit after working capita 2,759 3,785 4,117 3,553 3,912 5,426
Direct taxes paid = Tax Expense (596) (977) (1,001) (1,012) (1,048) (1,214)
Net cash generated from operating act 2,163 2,808 3,116 2,541 2,864 4,212
Payment towards capital expenditure ( (1,156) (581) (957) (1,659) (2,176) (655)
Proceeds from sale of fixed assets 4 3 3 12 7 3
Payment towards acquisition of subsi - (32) - (307) - (408)
Purchase of tax free bonds - - - (243) (514) (595)
Proceeds from sale of tax free bonds - - - 456 654 -
Purchase of non-current investments (50) (651) (6) (73) - -
Investments in mutual funds (10,908) (12,492) (15,451) (13,397) (10,789) (15,502)
Proceeds from sale / maturity of mut 9,846 11,591 13,702 14,023 10,472 14,290
Proceeds from sale of other current - - - 20 - -
Investments in bank deposits having (520) (24) (15) (523) (10) (326)
Investments in Deposit with financial (28) - - (300) (135) (595)
Maturity of bank deposits having ori 921 42 100 400 - 42
Inter corporate deposits refunded 50 7 0 0 0 0
Interest received 101 28 74 202 82 101
Dividends received 29 150 233 227 189 171
Net Cash (used in) investing activities (1,711) (1,958) (2,315) (1,162) (2,219) (3,474)

(Repayment of) long term borrowing 8 18 13 (15) (5) (5)

Shares bought back
Loan received as a part of COVID-19 relief measures
Specific project related grant received
Interest paid - - (2) (0) (2) (2)
Dividends paid (340) (440) (560) (1,040) (480) (800)
Tax on dividend paid (55) (75) (107) (212) (98) (150)
Net cash (used in) 􀁯nancing activities (387) (497) (657) (1,266) (584) (956)

Net Change in Cash 64 353 144 113 61 (218)

Cash BOP 433 499 833 988 1,401 1,463

Cash EOP 499 833 988 1,401 1,463 1,345

Cash acquired on Acquisition - - - 293 - -

Effect of exchange differences 1 (19) 11 8 1 101
 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26
2019 - A 2020 - A 2021 - E 2022 - E 2023 - E 2024 - E 2025 - E 2026 - E

4,863 4,523 2,895 3,446 4,477 5,291 6,343 7,437

(288) (545)
3 63
(181) (14)
1,573 1,660 1,413 1,349 1,244 1,302 1,392 1,558
1 -
107 (131)
(87) 119
21 59
71 (47)
1 -
71 -
(5) 84
- 237
183 248
14 -
(70) (46)

(34) (7)
69 (119)
(366) (165)
(4) 6
5,941 5,925 4,308 4,795 5,721 6,594 7,734 8,995

(6) (14)
(2) (235)
(135) (232)
176 (559)
(246) (895) 2,300 (4,473) 1,760 (4,882) 835 (5,368)
(180) 713 (1,606) 2,555 (1,546) 2,652 (1,212) 2,836
180 (145)
(213) (1,369) 694 (1,918) 214 (2,230) (376) (2,532)
5,728 4,556 5,002 2,878 5,935 4,364 7,358 6,463
(1,405) (1,328) (717) (854) (1,109) (1,311) (1,571) (1,842)
4,323 3,228 4,285 2,024 4,826 3,053 5,787 4,621
 (379) (758) (921) (1,073) (1,251) (1,459) (1,701) (1,984)
5 13
(148) (435)
(1,175) (902)
199 820
(145) -
- 25
(22,418) (19,457)
25,011 17,670
(4,050) 2,108
(300) -
650 250
(17) -
327 504
181 14
(2,259) (148) (921) (1,073) (1,251) (1,459) (1,701) (1,984)

(5) (5)
(571) (1,677)
- 39
- 3
(4) (63)
(881) (1,146) (640) (762) (989) (1,169) (1,402) (1,644)
(137) (154) (86) (102) (133) (157) (188) (221)
(1,598) (3,003) (726) (864) (1,122) (1,327) (1,590) (1,865)

466 76 2,638 87 2,452 267 2,495 772

1,345 1,739 1,900 4,538 4,625 7,077 7,344 9,840

1,739 1,900 4,538 4,625 7,077 7,344 9,840 10,611

- 37 - - - - - -
(71) 47 - - - - - -
Persistent Systems
Revenue Drivers
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Year 2011 - A 2012 - A 2013 - A 2014 - A 2015 - A 2016 - A 2017 - A

Method -1 (y/y % Growth)

Revenue from Operations 12,945 16,692 18,913 23,123 28,784
y/y % growth 29% 13% 22% 24%

Method-2 (CAGR %)
Revenue from 7,758 10,003 12,945 16,692 18,913 23,123 28,784
CAGR % - 9 Years

Method-3 (Segment Analysis)

Revenue % By Geography
North America 85.60% 82.50% 84.8% 85.1% 85.5% 85.5% 86.40%
Europe 5.90% 7.30% 6.5% 5.4% 6.7% 6.5% 5.50%
India 0.0% 0.0% 0.0% 0.0% 0.0% 6.7% 5.50%
ROW 8.50% 10.20% 8.7% 9.5% 7.8% 1.3% 2.60%
ROW + India 8.5% 10.2% 8.7% 9.5% 7.8% 8.0% 8.1%

Segment Revenue
North America 6,641 8,253 10,977 14,204 16,170 19,770 24,870
Europe 458 730 841 901 1,267 1,503 1,583
ROW + India 659 1,020 1,126 1,586 1,475 1,850 2,332
Total Revenue 7,758 10,003 12,945 16,692 18,913 23,123 28,784

Segment Revenue CAGR% - 9 Years

North America
Europe
ROW + India
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25
2018 - A 2019 - A 2020 - A 2021 - E 2022 - E 2023 - E 2024 - E 2025 - E

30,337 33,659 35,658 38,669 41,935 45,476 49,316 53,481

5% 11% 6% 8% 8% 8% 8% 8%

30,337 33,659 35,658 39,907 44,663 49,985 55,942 62,608

11.92% 11.9% 11.9% 11.9% 11.9% 11.9%

83.50% 81.70% 81.00%

7.50% 8.80% 9.50%
6.30% 7.00% 7.40%
2.70% 2.50% 2.10%
9.0% 9.5% 9.5%

25,331 27,500 28,883 34,008 40,041 47,146 55,510 65,359

2,275 2,962 3,388 4,231 5,285 6,601 8,246 10,299
2,730 3,198 3,388 4,063 4,873 5,845 7,010 8,408
30,337 33,659 35,658 42,302 50,200 59,592 70,766 84,067

18% 18% 18% 18% 18% 18%

25% 25% 25% 25% 25% 25%
20% 20% 20% 20% 20% 20%
Mar-26
2026 - E

57,997
8%

70,069
11.9%

76,956
12,864
10,085
99,905

18%
25%
20%
Persistent Systems
Revenue Driver - Price * Quantity Method
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16
Year 2013 - A 2014 - A 2015 - A 2016 - A

Revenue From operations in USD Mn 238 274 309 352

Revenue from Operations in INR Mn 12,945 16,692 18,913 23,123

Average Exchange Rate (INR/USD) 3% 54.4 60.9 61.3 65.8

Reveune Mix
Services 82.8% 82.0% 80.9% 78.9%
IP Led 17.2% 18.0% 19.1% 21.1%

Revenue By Delivery Centers

Global development Centers 18.2% 20.9% 24.8% 28.0%
India 64.6% 61.1% 56.1% 50.9%
IP Led 17.2% 18.0% 19.1% 21.1%

Revenue (INR Mn)

Global development Centers 2,356 3,038 3,442 4,208
India 8,363 10,783 12,217 14,938
IP Led 2,227 2,871 3,253 3,977
Revenue From Operations 12,945 16,692 18,913 23,123
y/y growth % 28.9% 13.3% 22.3%

Employee Details
Technical 6,540 7,349 7,861 8,618
Sales & BD 99 150 224 201
Others 331 358 421 445
Total 6,970 7,857 8,506 9,264

Team Addition 887 649 758

% Team Added 12.7% 8.3% 8.9%

Technical team Added 809 512 757

Technical as % Total Team Added 91.2% 78.9% 99.9%

Efforts and Utilisation Mix

Billable Person Months - Software professionals 55,541 62,091 64,248 65,553
GDC 3,718 4,585 5,754 7,682
India 51,823 57,506 58,493 57,871
Billed Person Months - Software professionals 41,176 44,033 46,094 48,950
GDC 3,294 3,980 5,113 6,623
India 37,882 40,053 40,981 42,327
IP Led Person Months 8,974 9,148 10,207 13,509

Utlilisation % - Software professionals

Linear 74.1% 70.9% 71.7% 74.7%
GDC 88.6% 86.8% 88.9% 86.2%
India 73.1% 69.7% 70.1% 73.1%

% Billable Software professionals Team Deployed at

GDC 6.7% 7.4% 9.0% 11.7%
India 93.3% 92.6% 91.0% 88.3%

Development Team
Billable Software Professionals 4,628 5,174 5,354 5,463
IP-Led Professionals 748 762 851 1,126
Trainees 1,164 1,412 1,656 2,030
As % Technical Team
Billable Software Professionals 70.8% 63.0% 58.9% 53.7%
IP-Led Professionals 11.4% 10.2% 9.5% 8.7%
Trainees 17.8% 15.8% 14.8% 13.5%

Linear Revenue / Billed Person Month (USD/PPM)

GDC 2% 13,119 14,416 14,952 14,891
India 5% 4,057 4,178 4,222 4,223
IP-Led 5% 4,558 5,393 5,774 5,492

Linear Revenue / Billed Person Month (INR/PPM)

GDC 714,099 878,002 916,510 979,182
India 220,832 254,460 258,795 277,690
IP-Led 248,112 328,430 353,903 361,168

Other Income

Other Income
Cash BOP + Current Investments
Other Income Rate %
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
2017 - A 2018 - A 2019 - E 2020 - E 2021 - E 2022 - E 2023 - E 2024 - E

429 471 481 502 388 439 497 562

28,784 30,337 33,659 35,658 28,406 33,105 38,590 44,993

67.1 64.5 70.0 71.1 73.2 75.4 77.7 80.0

72.0% 74.4% 75.1% 79.6% 84.4% 84.3% 84.1% 84.0%

28.0% 25.6% 24.9% 20.4% 15.6% 15.7% 15.9% 16.0%

26.8% 32.0% 30.5% 31.5% 33.6% 32.9% 32.3% 31.7%

45.2% 42.4% 44.6% 48.1% 50.8% 51.3% 51.8% 52.3%
28.0% 25.6% 24.9% 20.4% 15.6% 15.7% 15.9% 16.0%

5,239 5,521 6,126 6,490 9,536 10,900 12,460 14,244

18,595 19,598 21,744 23,035 14,440 16,992 19,996 23,531
4,951 5,218 5,789 6,133 4,430 5,212 6,134 7,218
28,784 30,337 33,659 35,658 28,406 33,105 38,590 44,993
24.5% 5.4% 11.0% 5.9% -20.3% 16.5% 16.6% 16.6%

8,808 8,329 9,185 9,835 10,700 11,642 12,668 13,784

193 211 273 263
459 436 504 534
9,460 8,976 9,962 10,632 11,573 12,598 13,714 14,928

196 (484) 986 670 941 1,025 1,116 1,214

2.1% -5.1% 11.0% 6.7% 8.9% 8.9% 8.9% 8.9%

190 (479) 856 650 865 942 1,025 1,116

96.9% 99.0% 86.8% 97.0% 91.9% 91.9% 91.9% 91.9%

68,760 71,206 71,563 81,287 62,566 68,074 74,070 80,596

8,515 10,609 10,703 11,202 8,990 9,781 10,643 11,580
60,245 60,597 60,860 70,085 53,576 58,293 63,427 69,016
 52,626 56,406 58,037 63,821 49,935 54,331 59,116 64,325
7,280 9,255 9,007 9,305 7,516 8,178 8,898 9,682
45,346 47,151 49,030 54,516 42,418 46,153 50,218 54,643
19,978 19,982 18,826 17,954 10,109 10,999 11,968 13,022

76.5% 79.2% 81.1% 78.5% 79.8% 79.8% 79.8% 79.8%

85.5% 87.2% 84.2% 83.1% 83.6% 83.6% 83.6% 83.6%
75.3% 77.8% 80.6% 77.8% 79.2% 79.2% 79.2% 79.2%

12.4% 14.9% 15.0% 13.8% 14.4% 14.4% 14.4% 14.4%

87.6% 85.1% 85.0% 86.2% 85.6% 85.6% 85.6% 85.6%

5,730 5,934 5,964 6,774 5,214 5,673 6,172 6,716

1,665 1,665 1,569 1,496 842 917 997 1,085
1,413 730 1,653 1,565 1,311 1,426 1,552 1,689

52.5% 55.6% 50.4% 47.1% 48.7% 48.7% 48.7% 48.7%

8.5% 9.0% 8.1% 7.6% 7.9% 7.9% 7.9% 7.9%
13.2% 14.0% 12.7% 11.8% 12.3% 12.3% 12.3% 12.3%

15,788 16,267 16,299 16,987 17,327 17,673 18,027 18,387

4,278 4,232 4,371 4,428 4,649 4,882 5,126 5,382
6,013 6,028 6,361 5,699 5,984 6,284 6,598 6,928

1,059,295 1,048,757 1,140,642 1,207,559 1,268,662 1,332,856 1,400,299 1,471,154

287,032 272,843 305,893 314,774 340,428 368,173 398,180 430,631
403,425 388,664 445,192 405,160 438,181 473,893 512,515 554,285
Mar-25 Mar-26
2025 - E 2026 - E

637 721
52,470 61,203

82.4 84.9

83.8% 83.7%
16.2% 16.3%

31.0% 30.4%
52.8% 53.2%
16.2% 16.3%

16,284 18,617
27,692 32,590
8,494 9,997
52,470 61,203
16.6% 16.6%

14,999 16,322

16,250 17,689

1,322 1,439
8.9% 8.9%

1,215 1,323
91.9% 91.9%

87,701 95,435
12,601 13,712
75,100 81,722
 69,995 76,168
10,536 11,465
59,459 64,703
14,170 15,420

79.8% 79.8%
83.6% 83.6%
79.2% 79.2%

14.4% 14.4%
85.6% 85.6%

7,308 7,953
1,181 1,285
1,838 2,000

48.7% 48.7%
7.9% 7.9%
12.3% 12.3%

18,755 19,130
5,651 5,934
7,274 7,638

1,545,594 1,623,801
465,728 503,684
599,459 648,315
Persistent Systems
Cost Drivers
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Year 2013 - A 2014 - A 2015 - A 2016 - A 2017 - A

Revenue from Operations 12,945 16,692 18,913 23,123 28,784

Employee Benefit expense 7,188 9,090 11,114 14,068 18,008

Cost of technical professionals 536 906 1,090 1,587 1,818
Other Expenses 2,094 2,553 2,806 3,554 4,304
Depreciation 783 1,026 939 990 1,490
Interest Expense 0 1 3 1 1
Tax Expense 754 934 993 924 992

Commonsize Analysis (As % of Revenue from Operations)

Employee Benefit expense 55.5% 54.5% 58.8% 60.8% 62.6%
Cost of technical professionals 4.1% 5.4% 5.8% 6.9% 6.3%
Other Expenses 16.2% 15.3% 14.8% 15.4% 15.0%
Depreciation 6.0% 6.1% 5.0% 4.3% 5.2%
Interest Expense 0.0% 0.0% 0.0% 0.0% 0.0%
Tax Expense 5.8% 5.6% 5.3% 4.0% 3.4%

Effective Tax Rate (Tax Expense/PBT) 28.7% 27.3% 25.5% 25.0% 24.8%

Dividends Paid 340 440 560 1,040 480

Dividend Tax 55 75 107 212 98

Dividend Payout Ratio 18.1% 17.6% 19.3% 37.5% 15.9%

Dividend Tax as % of Dividend Paid 16.2% 17.0% 19.1% 20.4% 20.4%
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25
2018 - A 2019 - A 2020 - A 2021 - E 2022 - E 2023 - E 2024 - E 2025 - E

30,337 33,659 35,658 28,406 33,105 38,590 44,993 52,470

18,316 19,250 21,556 16,709 19,743 22,856 26,741 31,131

3,181 3,490 3,919 3,034 3,587 4,151 4,858 5,655
4,153 5,357 5,260 4,356 4,980 5,861 6,801 7,950
1,585 1,573 1,660
1 3 63
1,062 1,347 1,121

60.4% 57.2% 60.5% 58.8% 59.6% 59.2% 59.4% 59.3%

10.5% 10.4% 11.0% 10.7% 10.8% 10.8% 10.8% 10.8%
13.7% 15.9% 14.8% 15.3% 15.0% 15.2% 15.1% 15.2%
5.2% 4.7% 4.7%
0.0% 0.0% 0.2%
3.5% 4.0% 3.1%

24.7% 27.7% 24.8% 24.8% 24.8% 24.8% 24.8% 24.8%

800 881 1,146 640 762 989 1,169 1,402

150 137 154 86 102 133 157 188

24.8% 25.1% 33.7% 29.4% 29.4% 29.4% 29.4% 29.4%

18.8% 15.6% 13.4% 13.4% 13.4% 13.4% 13.4% 13.4%
Mar-26
2026 - E

61,203

36,344
6,602
9,262

59.4%
10.8%
15.1%

24.8%

1,644
221

29.4%
13.4%
Persistent Systems
Asset Schedule
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)
Date Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Year 2013 - A 2014 - A 2015 - A 2016 - A 2017 - A

Property, Plant and Equipment 2,800 2,785 3,021 2,968 2,768

Other Intangible Assets 702 1,269 995 1,325 2,515
Total Fixed Assets 3,502 4,054 4,016 4,293 5,283

Depreciation & Amortisation 783 1,026 939 990 1,490

Depreciation & Amortisation Rate % 27% 21% 20% 28%

Purchase of Fixed Assets 1,156 581 957 1,659 2,176

Purchase of Fixed Assets as % Revenue from O 8.9% 3.5% 5.1% 7.2% 7.6%
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26
2018 - A 2019 - A 2020 - A 2021 - E 2022 - E 2023 - E 2024 - E 2025 - E 2026 - E

2,581 2,331 2,225 1,733 1,457 1,465 1,621 1,931 2,357

2,464 1,595 1,435 1,435 1,435 1,435 1,435 1,435 1,435
5,045 3,927 3,660 3,168 2,892 2,900 3,056 3,366 3,792

1,585 1,573 1,660 1,413 1,349 1,244 1,302 1,392 1,558

28% 30% 39% 34.3% 36.4% 35.4% 35.9% 35.6% 35.8%

655 379 758 921 1,073 1,251 1,459 1,701 1,984

2.2% 1.1% 2.1% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2%
Persistent Systems
Valuation-DCF
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)

Valuation Assumptions Data Sources

g (World Economic Growth) 5.0% Paper 99 , Goldman Sachs Publication 2003
Rf 6.0% 10 Year GOI Bond Yield
Rm 12.5% 10 Year CAGR% - NIFTY
Beta 0.75 in.reuters.com
CMP 1,650 in.reuters.com

Valuation Data
Total Debt (Long Term Borrowings) (2020)
Cash & Cash Equivalents (2020)
Number of Diluted Shares (2021)
Tax Rate (2021)
Interest Expense Rate (2021) 10%

MV of Equity
Total Debt
Total Capital

WACC
We
Wd
Ke
Kd
WACC

FCFF & Target Price

Explicit Forecast Period
2021 2022 2023 2024 2025
EBIT * (1-Tax Rate)
Dep
Purchase of Assets
Changes in Working Capital
FCFF

% Growth in Post Tax EBIT

As % Of Post Tax EBIT

Dep
Purchase of Assets
 Changes in Working Capital

FCFF
Terminal Value
Total Cash Flow

Enterprise Value (EV)

Less: Debt
Add: Cash
Equity Value

Target Price
% Returns Rating
% Returns < 5% SELL
>5%, < 15% BUY
Rating >15% BUY

Sensitivity of Target Price to Terminal growth % and WACC

Terminal Growth %
- 4.0% 4.3% 4.5% 4.8%
13.0%
13.3%
13.5%
13.8%
WACC

14.0%
14.3%
14.5%
14.8%
15.0%
blication 2003

Linear Decline Phase Terminal Yr

2026 2027 2028 2029 2030 2031 2032
Terminal Growth %
5.0% 5.3% 5.5% 5.8% 6.0%
Persistent Systems
Valuation-Relative
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)

PEER DATA
Capitalization
Number of Equity
Company Name Ticker Share Price Debt Cash
Shares Value

MindTree MINT.NS 1,170 165 5,668 10,830

Hexaware HEXT.NS 421 302 1,431 2,104
Mphasis MBFL.NS 1,140 188 12,954 11,134
Birlasoft BIRS.NS 165 278 1,450 6,623
Persistent Systems

Maximum
75th Percentile
Median
25th Percentile
Minimum

Valuation Multiples

MindTree
Hexaware
Mphasis
Birlasoft
Persistent Systems

Maximum
75th Percentile
Median
25th Percentile
Minimum
 Revenue EPS
Enterprise
TTM 1-Y FWD TTM 1-Y FWD
Value
Mar-20 Mar-21 Mar-20 Mar-21
77,600 79,200 38.33 50.61
55,800 62,800 21.24 21.61
88,400 94,900 63.09 63.31
32,900 36,900 8.06 10.26

Enterprise Value / Revenue P / E Multiple

Mar-20 Mar-21 Mar-20 Mar-21
Persistent Systems
Valuation-Summary
(All numbers in INR Million, Except per share data)
(Red for assumptions, Blue for Acutal data and Black for Calculations)

Multiple
Min 25 %ile Median 75 %ile Max Parameter
Relative Valuation
EV / Revenue (TTM)
EV / Revenue (Fwd-1)
P / E (TTM)
P / E (Fwd-1)
DCF Valuation
Target Price - DCF Sensitivity

Average Target Price

 Implied Share Price Data for Chart
Min 25 %ile Median 75 %ile Max 25 %ile
EV / Revenue (TTM)
EV / Revenue (Fwd-1)
P / E (TTM)
P / E (Fwd-1)
Target Price - DCF
DCF Valuation

ge Target Price
Median 75 %ile Max