Persistent Systems has invested significantly over the past 18 months to build a strong cloud partner ecosystem with leading cloud providers globally. With a series of acquisitions for $220 million, Persistent Systems now has one of the most powerful cloud capabilities among similar companies in the mid-cap sector. This cloud capability will strengthen its market strategy and the transformation will bring more convenience to customers.
Analysts at brokerage and research house IIFL have maintained buy rating on this multibagger stock. He has set a 12-month target of 5,020 and it remains his top midcap stock pick. Although aggressive M&A, supply pressures could be a major risk.
Keeping in view the overall improvement in the situation and preparedness of the government to deal with the pandemic, NDMA has decided that the provisions of the Disaster Management Act may not need to be invoked for prevention of COVID .
The note said, “Cloud has become a building block for digital transformation. The growing complexity of hybrid multi-cloud environments is expanding the scope of work for companies providing IT services. These companies are able to build capabilities accordingly.” COVID has played a big role in enhancing this environment.
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According to Gartner, the cloud services business is expected to reach approximately $500 billion by 2022. It is growing at the rate of 20%+ annually (YoY). The brokerage pointed out that hyperscalers like Amazon AWS, Microsoft Azure and Google Cloud are seeing super-normal growth in cloud revenue in the medium term.
The brokerage said in a note that “Persistent Systems’ revenue from each cloud provider is comparable to that of much larger companies. These revenues have grown from recent acquisitions that include Salesforce ($120-130m acquired Capiot), Microsoft Azure ($100 m, acquired Data Glove)), Google Cloud ($25 m+, MediaAgility acquired), IBM Cloud ($100 m+, Fusion360 acquired) and Amazon AWS (organic).
IIFL said the strength of its partner ecosystem is reflected in the number of certified professionals and the competencies and expertise in the cloud ecosystem. Where PSYS rank is more visible in this as compared to companies of similar size.
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