Persistent Systems: Sustained Growth and AI-Led Transformation in Q3 FY26

Persistent Systems, a global leader in AI-led digital engineering and enterprise modernization, has once again demonstrated robust performance, reporting its 23rd consecutive quarter of revenue growth. For the third quarter of fiscal year 2026 (Q3 FY26), the company announced a consolidated revenue of $422.5 million, marking a significant 17.3% year-on-year (YoY) increase. In Indian Rupee terms, revenue stood at ₹3,778.21 crore, reflecting a 23.4% YoY growth. Despite a one-time impact from new Labour Codes, Persistent Systems maintained a healthy profitability, with an EBIT margin of 14.4% and a Profit After Tax (PAT) margin of 11.6% for the quarter. This consistent performance underscores the company's strategic focus on AI-led innovation and deepening client relationships across its core industries.

The company's growth was broad-based across its key segments. The Banking, Financial Services & Insurance (BFSI) vertical led the charge, contributing 35.0% of the total revenue with ₹1,321.317 crore. Healthcare & Life Sciences accounted for 25.4% of revenue, bringing in ₹960.467 crore, while the Software, Hi-Tech & Emerging Industries segment remained the largest contributor at 39.6%, with revenues of ₹1,496.421 crore. This balanced growth across diverse sectors highlights Persistent Systems' ability to adapt and deliver value in a dynamic market environment. The management emphasized a deeper role in strategic client programs, driven by sustained demand for data, cloud, and digital engineering services.

Persistent Systems' strategic pivot towards an AI-led, platform-driven services strategy is a central theme of its recent success. The company has operationalized this strategy, focusing on both AI for Technology and AI for Business. Key proprietary platforms like SASVA, an AI-based software development and data lifecycle platform, and iAURA, which deploys agents for process and document intelligence, are instrumental in driving engineering hyper-productivity. Internally, Persistent Systems acts as 'Customer Zero' for its AI solutions, with platforms like PiAssist resolving 83% of HR queries autonomously and ITAssist reducing IT incident resolution time by 70%. This approach not only enhances internal efficiency but also provides battle-tested solutions for clients.

The company's commitment to innovation is further evidenced by its expanding IP portfolio, boasting over 105 patents spanning AI infrastructure and orchestration. Strategic partnerships with hyperscalers such as Microsoft, AWS, and Google are accelerating AI adoption and expanding enterprise impact for clients. This quarter, Persistent Systems was recognized as a Microsoft Frontier Firm and received the 2025 ISG Star of Excellence™ Award for AI and Data Excellence, underscoring its leadership in the AI space. The company's robust client relationships are also a testament to its strategy, with Top 5 customer revenue growing by 25.6% and Top 100 customers by 20.1% year-on-year.

Looking ahead, Persistent Systems has set ambitious long-term revenue aspirations, aiming for $2 billion by March 2027 and laying the foundation for$5 billion by March 2031. The management reiterated its priority to sustain growth through consistent execution as demand continues to shift towards larger, more complex engagements. While the company faced a one-time impact from the new Labour Codes and foreign exchange losses due to mark-to-market adjustments on hedges, it maintained strong capital efficiency with a Return on Capital Employed (ROCE) of 43.8% and Return on Equity (ROE) of 25.0%. The Board of Directors also declared an interim dividend of ₹22 per share, an increase from ₹20 in FY25, reflecting a consistent dividend payout policy aligned with growth objectives. Persistent Systems' proactive approach to AI, strong client focus, and disciplined financial management position it for continued success in the evolving digital landscape.