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Persistent Systems Limited Interim / Quarterly Report 2018

Oct 21, 2018

60826_rns_2018-10-21_82e4c2bd-85d6-4174-928f-1630d84720ec.pdf

Interim / Quarterly Report

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PERS ENT

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NSE & BSE / 2018-19 / 66

October 21, 2018

The Manager, Corporate Services, National Stock Exchange of India limited Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai 400051

Ref: Symbol: PERSISTENT

The Manager, Corporate Services, BSE limited 14'" Floor, P J Towers, Dalal Street, Mumbai 400001

Ref: Scrip Code: 533179

Dear Sir/ Madam,

Sub.: Fact Sheet - Consolidated Financial Data - for the quarter and half year ended September 30, 2018

Please find enclosed fact sheet of the Consolidated Financial Data for the quarter and half year ended September 30, 2018.

The Company has scheduled an investor/ analyst call on Monday, October 22, 2018 at 05:00 PM 1ST. During such call, the Management will comment on the financial results for the quarter and half year ended September 30, 2018 as well as on the business outlook.

Please acknowledge the receipt.

Thanking you,

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Yours faithfully, For Persistent Systems limited DJ>/;; AmitMre ,,,,/1,,:< Company Secretary Encl: As above

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Persistent Systems Limited, Bhageerath, 402, Sonapati Bapat Road, Pune 411016 \ Tel: +91 (20) 670 30000 Porslstent Systems Inc,, 2055, Laurelwood Rd, Suite 210, Santa Clara, CA 95054, USA I Tel: +1 (408) 216 7010

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Persistent Systems Limited Quarter ended September 30, 2018 Analyst Presentation and Fact Sheet October 21, 2018

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Forward-looking and Cautionary Statements

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Certain statements in this Presentation concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, our revenues highly dependent on customers located in the United States, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, concentration of major operations of the Company in one city, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. The Company may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Stock Exchanges and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company.

© 2018 Persistent Systems – Confidential

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Key Highlights

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Financial highlights

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: Quarterly Highlights

  • USD Revenue at US$ 118.23 Million, decline of 4.3% QoQ and increase of 0.1% YoY

  • INR Revenue at ₹ 8,355.57 Million, growth of 0.2% QoQ and 9.8% YoY

  • EBITDA ₹ 1,436.23 Million @ 17.2% of revenue, growth of 2.6% QoQ and 24.0% YoY

  • PAT ₹ 881.41 Million @ 10.5% of revenue, increase of 0.9% QoQ and 6.7% YoY

Half Yearly Highlights:

  • USD Revenue at US$ 241.83 Million, YoY growth of 4.7%

  • INR Revenue at ₹ 16,698.38Million, YoY growth of 12.1%

  • EBITDA ₹ 2,836.69 Million @ 17.0% of revenue, YoY growth of 28.9%

  • PAT ₹ 1,754.89 Million @ 10.5% of revenue, YoY growth of 11.3%

© 2018 Persistent Systems – Confidential

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Business Updates

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  • Persistent Systems acquired Herald Health™, a Boston based start-up that transforms healthcare data overload into clear and actionable insights for care providers and patients

  • Partners HealthCare launches New Center of Excellence in collaboration with Persistent Systems, Partners HealthCare Pivot Labs, with an aim to disrupt the delivery of healthcare to enhance the patient experience, improve clinical outcomes and control costs

  • Persistent Systems recognized in the Winner’s Circle by HFS Blueprint Report for Software Product Engineering Services

  • Persistent’s Trade Finance Solution wins Alconics award for Best Application of AI in Financial Services

© 2018 Persistent Systems – Confidential

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Sequential Q2 FY19 vs Q1 FY19

Particulars Q2FY19 Q1FY19 Change
QoQ		 Exps / Sales %
Q2FY19		 Q1FY19
Revenue ($ M)
Services 87.95 89.79 -2.0%
IP Led 30.28 33.81 -10.4%
Revenue ($ M) 118.23 123.60 -4.3%
Avg. Exchange Rate₹/US$ 70.67 67.50 4.7%
Revenue (₹M) 8,355.57 8,342.81 0.2%
Cost of Revenue ₹M ₹M
Employee Related Expenses 5,040.40 4,760.79 5.9% 60.3% 57.1%
Purchase / Royalty 215.95 412.63 -47.7% 2.6% 4.9%
Project related Travel Expenses 153.27 199.40 -23.1% 1.8% 2.4%
Total Direct costs 5,409.62 5,372.82 0.7% 64.7% 64.4%
Gross Profit 2,945.95 2,969.99 -0.8% 35.3% 35.6%
Sales & Marketing Exps 741.07 772.86 -4.1% 8.9% 9.3%
Admin. & Other Exps 743.32 741.37 0.3% 8.9% 8.9%
Doubtful Debt Provision 6.62 37.32 -82.3% 0.1% 0.4%
CSR Activities 18.71 17.98 4.1% 0.2% 0.2%
Total SGA 1,509.72 1,569.53 -3.8% 18.1% 18.8%
EBITDA 1,436.23 1,400.46 2.6% 17.2% 16.8%
Depreciation 119.72 122.86 -2.6% 1.4% 1.5%
Amortization 278.86 277.95 0.3% 3.3% 3.3%
EBIT 1,037.65 999.65 3.8% 12.4% 12.0%
Other Income / (Loss) 195.47 165.97 17.8% 2.3% 2.0%
Exchange Gain/(Loss) 35.67 20.63 72.9% 0.4% 0.2%
PBT 1,268.79 1,186.25 7.0% 15.2% 14.2%
Tax 387.38 312.77 23.9% 4.6% 3.7%
PAT 881.41 873.48 0.9% 10.5% 10.5%

© 2018 Persistent Systems – Confidential

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YoY Comparison Q2 FY19 vs Q2 FY18

Particulars Q2FY19 Q2 FY18 Change
QoQ		 Exps / Sales %
Q2FY19		 Q2 FY18
Revenue ($ M)
Services 87.95 87.34 0.7%
IP Led 30.28 30.76 -1.6%
Revenue ($ M) 118.23 118.10 0.1%
Avg. Exchange Rate₹/US$ 70.67 64.46 9.6%
Revenue (₹M) 8,355.57 7,612.52 9.8%
Cost of Revenue ₹M
Employee Related Expenses 5,040.40 4,763.96 5.8% 60.3% 62.6%
Purchase / Royalty 215.95 112.39 92.1% 2.6% 1.5%
Project related Travel Expenses 153.27 117.71 30.2% 1.8% 1.5%
Total Direct costs 5,409.62 4,994.06 8.3% 64.7% 65.6%
Gross Profit 2,945.95 2,618.46 12.5% 35.3% 34.4%
Sales & Marketing Exps 741.07 714.16 3.8% 8.9% 9.4%
Admin. & Other Exps 743.32 723.13 2.8% 8.9% 9.5%
Doubtful Debt Provision 6.62 6.17 7.3% 0.1% 0.1%
CSR Activities 18.71 17.18 8.9% 0.2% 0.2%
Total SGA 1,509.72 1,460.64 3.4% 18.1% 19.2%
EBITDA 1,436.23 1,157.82 24.0% 17.2% 15.2%
Depreciation 119.72 130.03 -7.9% 1.4% 1.7%
Amortization 278.86 249.41 11.8% 3.3% 3.3%
EBIT 1,037.65 778.38 33.3% 12.4% 10.2%
Other Income / (Loss) 195.47 133.49 46.4% 2.3% 1.8%
Exchange Gain/(Loss) 35.67 202.69 -82.4% 0.4% 2.7%
PBT 1,268.79 1,114.56 13.8% 15.2% 14.6%
Tax 387.38 288.33 34.4% 4.6% 3.8%
PAT 881.41 826.23 6.7% 10.5% 10.9%

© 2018 Persistent Systems – Confidential

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YoY Com arison H1 FY19 vs H1 FY18 p

Particulars H1 FY 19 H1 FY 18 Change Exps / Sales %
H1 FY 19		 H1 FY 18
Revenue ($ M)
Services 177.74 169.55 4.8%
IP Led 64.09 61.52 4.2%
Revenue ($ M) 241.83 231.07 4.7%
Avg. Exchange Rate₹/US$ 69.05 64.45 7.1%
Revenue (₹M) 16,698.38 14,892.67 12.1%
Cost of Revenue ₹ M ₹ M
Employee Related Expenses 9,801.19 9,240.94 6.1% 58.7% 62.1%
Purchase / Royalty 628.58 222.18 182.9% 3.8% 1.5%
Project related Travel Expenses 352.67 314.11 12.3% 2.1% 2.1%
Total Direct costs 10,782.44 9,777.23 10.3% 64.6% 65.7%
Gross Profit 5,915.94 5,115.44 15.6% 35.4% 34.3%
Sales & Marketing Exps 1,513.93 1,369.93 10.5% 9.1% 9.2%
Admin. & Other Exps 1,484.69 1,488.61 -0.3% 8.9% 10.0%
Doubtful Debt Provision 43.94 17.31 153.8% 0.3% 0.1%
CSR Activities 36.69 38.19 -3.9% 0.2% 0.3%
Total SGA 3,079.25 2,914.04 5.7% 18.4% 19.6%
EBITDA 2,836.69 2,201.40 28.9% 17.0% 14.8%
Depreciation 242.58 262.79 -7.7% 1.5% 1.8%
Amortization 556.81 508.56 9.5% 3.3% 3.4%
EBIT 2,037.30 1,430.05 42.5% 12.2% 9.6%
Other Income / (Loss) 361.44 316.77 14.1% 2.2% 2.1%
Exchange Gain/(Loss) 56.30 387.14 -85.5% 0.3% 2.6%
PBT 2,455.04 2,133.96 15.0% 14.7% 14.3%
Tax 700.15 556.84 25.7% 4.2% 3.7%
PAT 1,754.89 1,577.12 11.3% 10.5% 10.6%

© 2018 Persistent Systems – Confidential

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Consolidated Balance Sheet

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₹ M
Particulars As on
September 30,
2018		 As on
September 30,
2017		 As on March 31,
2018
Assets
PPE and Intangible assets 5,011.28 5,766.80 5,173.88
Non-Current Assets 884.00 531.77 605.90
Cash and Investments 13,640.92 10,256.59 12,264.75
Other Current Assets 9,151.78 8,140.00 8,273.68
Total 28,687.98 24,695.16 26,318.21
Equity and Liabilities
Equity 22,829.11 20,257.62 21,271.99
Non-Current Liabilities 196.99 188.16 176.30
Current Liabilities 5,661.88 4,249.38 4,869.92
Total 28,687.98 24,695.16 26,318.21

© 2018 Persistent Systems – Confidential

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Fact Sheet

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Fact Sheet

Revenue Nos./% Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Revenue from Operations,USD M 118.23 123.60 116.95 122.53 118.10 470.55 429.01
%,q-o-q/y-o-y growth -4.3% 5.7% -4.6% 3.8% 4.5% 9.7% 22.0%
Revenue from Operations,INR M 8,355.57 8,342.81 7,525.46 7,918.90 7,612.52 30,337.03 28,784.39
%, q-o-q/y-o-y 0.2% 10.9% -5.0% 4.0% 4.6% 5.4% 24.5%
Business
Offerings:
Revenue Mix		 % Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Services 74.4% 72.6% 77.7% 73.2% 74.0% 74.4% 72.0%
IP Led 25.6% 27.4% 22.3% 26.8% 26.0% 25.6% 28.0%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Segments
Revenue Mix		 % Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Services 43.0% 41.5% 45.5% 41.9% 43.7% 43.8% 45.5%
Digital 22.0% 21.4% 24.0% 22.0% 20.9% 21.3% 16.3%
Alliance 29.5% 32.1% 24.3% 29.6% 27.3% 27.6% 29.4%
Accelerite 5.5% 5.0% 6.2% 6.5% 8.1% 7.3% 8.8%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

© 2018 Persistent Systems – Confidential

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Fact Sheet

Geography:
Revenue Mix		 % Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
North America 82.6% 79.7% 80.9% 84.4% 83.4% 83.5% 86.4%
Europe 7.5% 12.0% 8.2% 7.3% 8.5% 7.5% 5.5%
India 7.3% 6.1% 7.9% 5.8% 5.6% 6.3% 5.5%
ROW 2.6% 2.2% 3.0% 2.5% 2.5% 2.7% 2.6%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Industry
Classification		 Nos. Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
ISV 39.5% 38.8% 40.6% 38.5% 39.9% 39.9% 43.5%
Enterprise 34.9% 33.8% 37.1% 34.7% 34.1% 34.5% 28.5%
IP Led 25.6% 27.4% 22.3% 26.8% 26.0% 25.6% 28.0%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Revenue by
Delivery Centers		 % Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Global Development Centers 29.7% 31.1% 34.1% 32.1% 31.9% 32.0% 26.8%
India 44.7% 41.5% 43.6% 41.1% 42.1% 42.4% 45.2%
IP Led 25.6% 27.4% 22.3% 26.8% 26.0% 25.6% 28.0%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

© 2018 Persistent Systems – Confidential

12

Fact Sheet

Clients
billed		 Nos. Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Services 433 438 426 431 419 569 462
IP Led 178 181 177 268 277 387 465
Includes one time clients with overlap across business offerings
Revenue
Concentration		 % Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Top 1 25.7% 23.8% 21.7% 28.0% 25.9% 25.9% 28.3%
Top 5 43.3% 43.8% 40.9% 46.3% 43.8% 43.9% 44.6%
Top 10 52.4% 53.7% 49.9% 55.3% 53.5% 53.5% 53.1%
Client
Engagement
Size		 Nos. Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Large > $ 3Mn 18 18 18 19 19 18 15
Medium > $ 1Mn, < $ 3Mn 56 58 53 51 49 53 55
DSO Nos. Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Days 63 68 66 66 66 66 65

© 2018 Persistent Systems – Confidential

13

Fact Sheet

Yield USD / PPM Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
5,329 5,497 5,225 5,355 5,096 5,160 4,834
Yield is computed as a ratio of total revenue to billable person months excluding employees under training.
Linear Revenue
Per Billed
Person Month		 USD / PPM Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Global Delivery centers – Linear 15,787 16,360 16,662 16,314 16,023 16,267 15,788
India - Linear 4,372 4,333 4,349 4,220 4,148 4,232 4,278
Attrition
Rate		 % Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
(TTM basis) 15.4% 14.8% 14.7% 14.7% 15.5% 14.7% 15.7%
People
Numbers		 Nos. Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Technical 8,566 8,196 8,329 8,460 8,599 8,329 8,808
Sales &BusinessDevelopment 247 237 211 206 208 211 193
Others 489 469 436 443 439 436 459
Total 9,302 8,902 8,976 9,109 9,246 8,976 9,460

© 2018 Persistent Systems – Confidential

14

Fact Sheet

Efforts and Utilization
Mix - Linear		 Nos. / % Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
Billable Person Months 17,483 17,593 17,382 17,943 18,245 71,207 68,761
- Global DeliveryCenters 2,656 2,757 2,713 2,777 2,689 10,609 8,515
- India 14,827 14,836 14,669 15,166 15,556 60,597 60,245
BilledPerson Months 14,318 14,205 14,119 14,335 14,340 56,405 52,626
-Global Delivery Centers 2,221 2,348 2,391 2,413 2,346 9,255 7,280
- India 12,097 11,857 11,728 11,922 11,994 47,151 45,346
Utilization
- Linear(Blended) 81.9% 80.7% 81.2% 79.9% 78.6% 79.2% 76.5%
-Global Delivery Centers 83.6% 85.2% 88.2% 86.9% 87.2% 87.2% 85.5%
- India 81.6% 79.9% 79.9% 78.6% 77.1% 77.8% 75.3%
IP Led Nos. Q2FY19 Q1FY19 Q4FY18 Q3FY18 Q2FY18 FY18 FY17
IPLed Person Months 4,704 4,891 5,003 4,936 4,931 19,982 19,978

© 2018 Persistent Systems – Confidential

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Thank You

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