Persistent Systems Q4 FY26 profit up 34%, revenue rises 25%

Key takeaway from the March quarter

Persistent Systems reported a sharp rise in profitability in the January to March quarter of FY26, backed by strong revenue growth. The mid-tier IT services company said consolidated net profit rose 33.73% year-on-year to ₹529.26 crore in Q4 FY26. In the same quarter last year, the company had posted ₹395.76 crore, according to regulatory filings. Revenue from operations increased about 25% to ₹4,055.93 crore. The year-ago quarter revenue was ₹3,242.11 crore.

Q4 FY26: Profit growth outpaces revenue

The March quarter showed profit growth that outpaced topline expansion on a year-on-year basis. Net profit rose by 33.73% while revenue increased by 25.10% for the quarter ended March 2026. The company’s Q4 performance also marked a sequential improvement over the October to December period. Persistent said profit rose 20.43% sequentially, and revenue increased 7.35% over the previous quarter.

One-time statutory impact from new labour codes

Persistent Systems also flagged a statutory impact linked to India’s new labour codes. The company noted an impact of ₹89 crore due to the implementation of the new labour codes. In earlier quarterly disclosures, the company had attributed margin pressure to one-time costs related to gratuity and leave encashment provisions under these labour code changes. The repeated references across quarters indicate that regulatory-related cost adjustments remained a key swing factor in reported profitability.

FY26 full-year numbers: Profit up 33%, sales up 24%

For the full year FY26, Persistent’s consolidated profit climbed 33.20% to ₹1,865.12 crore, compared with ₹1,400.16 crore in FY25. Annual sales rose 23.53% to ₹14,748.45 crore in the year ended March 2026, up from ₹11,938.72 crore in the year ended March 2025. The combination of stronger revenue growth and higher profit suggests that scale benefits and execution held up, even as the company absorbed regulatory-related one-time costs.

Q3 FY26 recap: Revenue growth with margin pressure

In Q3 FY26 (quarter ended December 31, 2025), Persistent reported consolidated revenue of ₹3,778.2 crore, up 23.4% year-on-year and 5.5% sequentially. In U.S. dollar terms, Q3 revenue was $122.5 million, up 17.3% year-on-year and 4.0% quarter-on-quarter. Net profit (PAT) in Q3 FY26 stood at ₹439.4 crore, a 17.8% year-on-year increase. However, PAT declined about 6.8% sequentially, with the company linking the decline to the impact of the new labour codes.

Margins and operating metrics cited in Q3 disclosures

Persistent reported an EBIT margin of 14.4% in Q3 FY26. The company said this margin included a one-time impact of around 2.3% on EBIT due to the new labour codes, and that the underlying EBIT margin would have been 16.7% excluding that impact. Q3 EBIT was reported at ₹542.75 crore, while profit before tax (PBT) was ₹564.99 crore. PAT margin for Q3 was stated at 11.6%. Earnings per share was ₹28.20 in Q3 FY26 compared with ₹30.30 in the previous quarter.

Q2 FY26 reference point: Higher profits and EBIT

For Q2 FY26 (quarter ended September 30, 2025), the company reported a net profit of ₹471.4 crore for the July to September quarter, a 45% increase from last year as cited in the provided report. Operating profit (EBIT) rose 43.7% year-on-year to ₹583.7 crore. In the company’s audited highlights for Q2 FY26, EBIT was shown at ₹583.74 crore (₹5,837.4 million), with an EBIT margin of 16.3% and quarter-on-quarter EBIT growth of 12.7%.

What the sequence says about FY26 execution

Across Q2, Q3 and Q4 of FY26, Persistent showed consistent revenue expansion while reported margins moved with one-time regulatory costs. The Q3 disclosures also said the company achieved its 23rd sequential quarter of revenue growth. Headcount was cited at 26,500+ in the same set of quarterly highlights. While Q3 profitability was weighed down by labour code impacts, Q4 delivered a strong sequential rebound in profit and continued revenue momentum.

Summary table of reported figures

Why investors track the labour code impact

Persistent’s disclosures repeatedly separated underlying performance from one-time labour code effects, particularly in Q3. In Q3 FY26, the company quantified the one-time impact at about 2.3% on EBIT and about 1.8% on PAT. This matters because it affects comparability of reported margins across quarters, especially when revenue continues to grow sequentially. Q4 also included a specific ₹89 crore statutory impact reference tied to the labour codes, reinforcing that the implementation has accounting and cost implications.

Conclusion

Persistent Systems closed Q4 FY26 with net profit of ₹529.26 crore and revenue of about ₹4,055.93 crore, posting strong year-on-year growth and a sequential improvement over Q3. For FY26, profit rose to ₹1,865.12 crore on sales of ₹14,748.45 crore. The company’s reporting also continued to highlight one-time costs and statutory impacts linked to the new labour codes, which influenced margins and quarter-to-quarter profit movements in FY26.