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Persistent Systems Limited Interim / Quarterly Report 2020

Jul 25, 2020

60826_rns_2020-07-25_10847e06-ff65-40bd-9ba5-ba940dd473e9.pdf

Interim / Quarterly Report

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NSE & BSE / 2020-21 / 41

July 25, 2020

The Manager, Corporate Services, National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai 400 051

Ref: Symbol: PERSISTENT

The Manager, Corporate Services, Bombay Stock Exchange Limited 14[th] Floor, P J Towers, Dalal Street, Mumbai 400 001

Ref: Scrip Code: 533179

Dear Sir/Madam,

Sub: Fact Sheet – Consolidated Financial Data – for the quarter ended June 30, 2020

Please find enclosed fact sheet of the Consolidated Financial Data for the quarter ended June 30, 2020.

The Company has scheduled an investor / analyst call on Monday, July 27, 2020 at 5.00 PM IST. During such call, the Management will comment on the financial results for the quarter ended June 30, 2020 as well as on the business outlook. The details of the said investor call are available on the website of the Company.

Please acknowledge the receipt.

Thanking you,

Yours Sincerely, For Persistent Systems Limited

Amit Atre Company Secretary ICSI Membership No.: A20507

Encl: As above

Persistent Systems Limited, Bhageerath, 402 Senapati Bapat Road, Pune 411 016, Maharashtra, India CIN - L72300PN1990PLCO56696

Tel: +91 (20) 670 30000 | Fax - +91 (20) 6703 0008 | E-mail - [email protected] | Website - www.persistent.com

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Quarter ended June 30th, 2020 Analyst Presentation

July 25, 2020

Forward-looking and Cautionary Statements

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

Confidential © 2020 Persistent Systems

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.

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2

Financial Highlights

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Financial Highlights for Q1FY21

USD Revenue $131M

+3.1% +9.5% QoQ YoY INR EBITDA ₹1,464M @ 14.8% Revenue +14.7% +21.8% QoQ YoY

Confidential © 2020 Persistent Systems

4

INR Revenue ₹9,914M

+7.0% +19.1% QoQ YoY INR PAT ₹900M @ 9.1% Revenue +7.4% +9.1% QoQ YoY

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Highlights for the Quarter

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Segment Revenue Client concentration
9.1% 8.0%
8.8%
48.5% 49.5% 50.6% 53.2% 53.4% 8.2% 8.3%
20.6% 21.0%
20.9%
22.3%
23.1%
19.7% 19.2% 18.9%
18.4% 18.9%
23.7% 23.6%
21.5%
31.8% 31.3% 30.5% 28.4% 27.7% 17.7% 19.2%
Q1FY21 Q4FY20 Q3FY20 Q2FY20 Q1FY20 Q1FY21 Q4FY20 Q3FY20 Q2FY20 Q1FY20
BFSI Healthcare Life Sciences Technology Companies & Emerging Verticals Top 1 Top 2- 5 Top 6-10
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Share of revenue from BFSI customers increased from 27.7% in Q1FY20 to 31.8% in Q1FY21

Share of Top 5 Customers reduced from 44.6% in Q1FY20 to 40.8% in Q1FY21

Confidential © 2020 Persistent Systems

5

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Key Wins for the Quarter

Banking, Financial Services and Insurance

Top 10 Global Bank: Innovate and modernize payments for commercial unit — Direct Writer of Surety Bonds & Insurance: Modern platform to customize and purchase insurance plans, ensuring seamless migrations of legacy systems — US Retirement, Healthcare and Education Savings: End-to-end AIenabled IT Service and asset management platform

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Healthcare
Life Sciences
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Large Pharmacy Benefits Manager: Platform enabling nurse practitioner and caregiver collaboration, optimize patient care — Drug and Medical Device Database Provider: E-Prescription platform connecting PMRs, PBMs and pharmacies across the United States — Integrated Healthcare Provider & Insurance Company: Patient engagement platform to mediate and monitor patients, improve patient experiences and reduce need for hospital visits

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Confidential © 2020 Persistent Systems
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Key Wins for the Quarter
Industrial Software & Hi-Tech
Leading Aerospace Manufacturer: Engineering lifecycle management and Leading Enterprise Software company in Data Virtualization space:
related services Global Technology Center to accelerate & scale product development &
support

Canadian Rail Network Consortium: Engineering lifecycle management —
solutions for modernization
Top 5 Tech Leader: Pioneering Smart Campus & Incentive Management
— Programs, leveraging IoT & Data Expertise
Leading Audio Communications Equipment Manufacturer: IPM solution to —
upgrade product catalogue
Global Environmental Health, Safety and Compliance Software
Developer: Quality management systems
Confidential © 2020 Persistent Systems
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Strengthening our Partner Ecosystem

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IBM Cloud Pak deployment for enterprises

Persistent now has more than 2,000 professionals in containerization and Kubernetes, including a new Cloud Pak deployment practice to help clients migrate workloads across IBM Cloud.

Achieved SaaS & DevOps Competencies

Recognizes deep cloud-based expertise and critical DevOps skills to enhance collaboration and accelerate time to market, adds to AWS Competencies achieved – including IoT, Data & Analytics

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Persistent Systems was mentioned in IBM CEO’s Q2 2020 Earnings address as one of the key partners helping expand the reach of IBM's hybrid cloud platform.

Confidential © 2020 Persistent Systems

Persistent with Dassault Systemes bolsters Digital Capabilities in Europe

Expands partnership and brings industrial OEMs and suppliers to the Dassault Systèmes 3DEXPERIENCE platform.

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We are actively engaging in the market with our partner ecosystem through digital events and content

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Confidential © 2020 Persistent Systems

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We advanced our leadership in Enterprise Software, Consumer Software and Innovation Services

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Enterprise Software 2019

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Consumer Software 2019

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Competency

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Competency

“European Salesforce services clients should consider Persistent Systems as a credible alternative” – September 2019 Confidential © 2020 Persistent Systems

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Persistent recognized as leading innovation partner for digital transformation services.

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Large sourcing advisors started noticing our capabilities and deal momentum

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Positioned as Leader right there with large players

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Confidential © 2020 Persistent Systems

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Financial Details

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Sequential Q1 FY21 vs Q4 FY20

Particulars Q1FY21 Q4FY20 Change
QoQ
Exps / Sales %
Q1FY21
Q4FY20
Revenue ($ M)
Services 108.24 106.31 1.8%
IP Led 22.78 20.74 9.8%
Revenue ($ M) 131.02 127.05 3.1%
Avg. Exchange Rate ₹ /US$ 75.69 72.91 3.8%
Revenue (₹ M) 9,913.85 9,263.65 7.0%
Cost of Revenue ₹ M ₹ M
Employee Related Expenses 6,179.40 5,830.32 6.0% 62.3% 62.9%
Purchase / Royalty 392.34 163.98 139.3% 4.0% 1.8%
Project related Travel Expenses 74.63 135.33 -44.9% 0.8% 1.5%
Total Direct costs 6,646.37 6,129.63 8.4% 67.0% 66.2%
Gross Profit 3,267.48 3,134.02 4.3% 33.0% 33.8%
Sales & Marketing Exps 861.80 948.56 -9.1% 8.7% 10.2%
Admin. & Other Exps 792.79 840.13 -5.6% 8.0% 9.1%
Doubtful Debt Provision 53.10 38.78 36.9% 0.5% 0.4%
CSR Activities - Regular 21.11 29.70 -32.7% 0.2% 0.3%
CSR Activities – COVID Donations 74.32 0.00 0.7% 0.0%
Total SGA 1,803.12 1,857.17 -2.9% 18.2% 20.0%
EBITDA 1,464.36 1,276.85 14.7% 14.8% 13.8%
Depreciation 109.80 111.14 -1.0% 1.1% 1.2%
Amortization 325.81 309.11 5.3% 3.3% 3.3%
EBIT 1,028.75 856.60 20.1% 10.4% 9.2%
Other Income / (Loss) 279.32 229.33 21.8% 2.8% 2.5%
Exchange Gain/(Loss) (87.63) 44.50 -296.9% -0.9% 0.5%
PBT 1,220.44 1,130.43 8.0% 12.3% 12.2%
Tax 320.36 292.22 9.6% 3.2% 3.2%
PAT 900.08 13 838.21 7.4% 9.1% 9.0%

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YoY Comparison Q1 FY21 vs Q1 FY20

Particulars Q1FY21 Q1FY20 Change
YoY
Exps / Sales %
Q1FY21
Q1FY20
Revenue ($ M)
Services 108.24 93.86 15.3%
IP Led 22.78 25.76 -11.6%
Revenue ($ M) 131.02 119.62 9.5%
Avg. Exchange Rate ₹ /US$ 75.67 69.56 8.8%
Revenue (₹ M) 9,913.85 8,321.14 19.1%
Cost of Revenue ₹ M ₹ M
Employee Related Expenses 6,179.40 5,061.19 22.1% 62.3% 60.8%
Purchase / Royalty 392.34 193.58 102.7% 4.0% 2.3%
Project related Travel Expenses 74.63 179.25 -58.4% 0.8% 2.2%
Total Direct costs 6,646.37 5,434.02 22.3% 67.0% 65.3%
Gross Profit 3,267.48 2,887.12 13.2% 33.0% 34.7%
Sales & Marketing Exps 861.80 765.24 12.6% 8.7% 9.2%
Admin. & Other Exps 792.79 893.71 -11.3% 8.0% 10.7%
Doubtful Debt Provision 53.10 7.23 634.4% 0.5% 0.1%
CSR Activities - Regular 21.11 19.01 5.2% 0.2% 0.2%
CSR Activities – COVID Donations 74.32 0.00 0.7% 0.0%
Total SGA 1,803.12 1,685.19 7.0% 18.2% 20.3%
EBITDA 1,464.36 1,201.93 21.8% 14.8% 14.4%
Depreciation 109.80 110.20 -0.2% 1.1% 1.3%
Amortization 325.81 275.97 18.0% 3.3% 3.3%
EBIT 1,028.75 815.76 26.1% 10.4% 9.8%
Other Income / (Loss) 279.32 202.02 38.3% 2.8% 2.4%
Exchange Gain/(Loss) (87.63) 79.83 -209.8% -0.9% 1.0%
PBT 1,220.44 1,097.61 11.2% 12.3% 13.2%
Tax 320.36 272.91 17.4% 3.2% 3.3%
PAT 900.08 14
824.70
9.1% 9.1% 9.9%

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Balance sheet

sheet
₹ M
Particulars As on
June 30, 2020
As on
March 31, 2020
As on
June 30, 2019
Assets
PPE and Intangible assets 4,653.62 4,618.66 4,858.53
Non-Current Assets 1,539.54 1,467.52 740.27
Cash and Investments 14,938.96 14,716.85 13,400.68
Other Current Assets 10,748.79 9,986.50 8,667.80
Total 31,880.91 30,789.53 27,667.28
Equity and Liabilities
Equity 25,050.86 23,857.55 22,464.94
Non-Current Liabilities 735.06 582.37 757.41
Current Liabilities 6,094.99 6,349.61 4,444.93
Total 31,880.91 30,789.53 27,667.28

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15

Fact Sheet – Q1FY21

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Fact Sheet

Description / Nos. / % Q1FY21 Q4FY20 Q3FY20 Q2FY20 Q1FY20 FY20 FY19
Revenue Revenue from Operations, USD M
% QoQ / YoY growth
Revenue from Operations, INR M
131.02
3.1%
9,913.85
127.05
-1.8%
9,263.65
129.43
3.1%
9227.29
125.51
4.9%
8,846.00
119.62
1.1%
8,321.14
501.61
4.3%
35,658.08
480.97
2.2%
33,659.41
% QoQ / YoY growth 7.0% 0.4% 4.3% 6.3% 0.0% 5.9% 11.0%
Business Offerings Revenue Mix Description / %
Services
IP Led
Total
Q1FY21
82.6%
17.4%
100.0%
Q4FY20
83.7%
16.3%
100.0%
Q3FY20
78.8%
21.2%
100.0%
Q2FY20
77.5%
22.5%
100.0%
Q1FY20
78.5%
21.5%
100.0%
FY20
79.6%
20.4%
100.0%
FY19
75.1%
24.9%
100.0%
Segment Revenue Mix Description / %
BFSI
Healthcare & Life Science
Tech. Cos. & Emerging Verticals
Q1FY21
31.8%
19.7%
48.5%
Q4FY20
31.3%
19.2%
49.5%
Q3FY20
30.5%
18.9%
50.6%
Q2FY20
28.4%
18.4%
53.2%
Q1FY20
27.7%
18.9%
53.4%
FY20
29.5%
18.9%
51.6%
FY19
25.3%
18.4%
56.3%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

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Fact Sheet

Revenue
Mix by Business
Units
Description / %
Q1FY21
Q4FY20
Q3FY20
Q2FY20
Q1FY20
FY20
FY19
Description / %
Q1FY21
Q4FY20
Q3FY20
Q2FY20
Q1FY20
FY20
FY19
Technology Services 77.1%
77.8%
73.3%
71.9%
72.2%
73.8%
71.0%
22.9%
22.2%
26.7%
28.1%
27.8%
26.2%
29.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Alliance
Total
Accelerite has been merged with Technology Services from Q1FY21. Prior period numbers have been regrouped accordingly.
Geography
Revenue Mix
Description / %
Q1FY21
Q4FY20
Q3FY20
Q2FY20
Q1FY20
FY20
FY19
North America
80.4%
80.2%
80.1%
81.4%
82.5%
81.0%
81.7%
Europe
10.2%
8.8%
10.6%
9.9%
8.5%
9.5%
8.8%
India
7.9%
9.0%
7.4%
6.7%
6.7%
7.4%
7.0%
ROW
1.5%
2.0%
1.9%
2.0%
2.3%
2.1%
2.5%
Total
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Revenue
Concentration
Description / %
Q1FY21
Q4FY20
Q3FY20
Q2FY20
Q1FY20
FY20
FY19
Top 1 17.7%
19.2%
21.5%
23.7%
23.6%
22.0%
24.0%
40.8%
41.5%
42.3%
44.3%
44.6%
43.2%
42.4%
49.0%
49.9%
51.1%
53.4%
52.6%
51.7%
51.8%
Top 5
Top 10

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Fact Sheet

Revenue by Revenue by Delivery Centers Delivery Centers Description / %
Global Development Centers
India
IP Led
Q1FY21
33.7%
48.9%
17.4%
Q4FY20
33.0%
50.7%
16.3%
Q3FY20
31.5%
47.3%
21.2%
Q2FY20
31.0%
46.5%
22.5%
Q1FY20
30.5%
48.0%
21.5%
FY20
31.5%
48.1%
20.4%
FY19
30.5%
44.6%
24.9%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Client Billed Nos.
Services
Q1FY21
508
Q4FY20
501
Q3FY20
483
Q2FY20
470
Q1FY20
429
FY20
653
FY19
586
IP Led 140 151 154 156 167 257 287
Includes one-time clients with overlap across business offerings
DSO Nos.
Days
Q1FY21
69
Q4FY20
65
Q3FY20
68
Q2FY20
64
Q1FY20
65
FY20
65
FY19
63
Client Engagement Size Nos.
Large > USD 5M
Medium > USD 1M, < USD 5M
Q1FY21
15
63
Q4FY20
11
61
Q3FY20
10
65
Q2FY20
11
65
Q1FY20
10
68
FY20
11
61
FY19
10
67

Re-categorized Large clients to more than $5M and Medium clients from $1M to $5M. Prior period numbers are aligned accordingly.

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Fact Sheet

Nos. Q1FY21 Q4FY20 Q3FY20 Q2FY20 Q1FY20 FY20 FY19
People Numbers Technical
Sales and Business Development
Others
10,027
274
528
9,835
263
534
9,729
266
537
9,726
285
532
9,363
272
532
9,835
263
534
9,185
273
504
Total 10,829 10,632 10,532 10,543 10,167 10,632 9,962
Linear Revenue Per Billed PM* USD / Per Person Month*
Global Delivery Centres
India
Q1FY21
17,036
4,308
Q4FY20
17,276
4,427
Q3FY20
16,761
4,420
Q2FY20
17,155
4,437
Q1FY20
16,742
4,427
FY20
16,987
4,428
FY19
16,299
4,371
*Revenue per billed PM excludes IP Led revenue and calculated on total revenue including contractual reimbursable portion.
Attrition Rate %
TTM Basis
Q1FY21
12.7%
Q4FY20
14.3%
Q3FY20
14.9%
Q2FY20
15.7%
Q1FY20
17.1%
FY20
14.3%
FY19
16.7%
IP Led Nos.
IP Led Person Months
Q1FY21
4,031
Q4FY20
4,317
Q3FY20
4,325
Q2FY20
4,602
Q1FY20
4,711
FY20
17,954
FY19
18,826

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Fact Sheet

Description / Nos. / % Q1FY21 Q4FY20 Q3FY20 Q2FY20 Q1FY20 FY20 FY19
Billable Person Months 22,246 21,580 20,419 19,846 19,441 81,287 71,563
- Global Delivery Centers 3,060 2,872 2,893 2,779 2,658 11,202 10,703
Efforts and Utilization Mix - Linear - India
Billed Person Months
- Global Delivery Centers
- India
Linear Utilization
19,186
17,461
2,595
14,866
18,708
16,975
2,425
14,550
17,526
16,295
2,430
13,865
17,067
15,409
2,271
13,138
16,783
15,141
2,179
12,962
70,085
63,820
9,305
54,516
60,860
58,037
9,007
49,030
- Blended 78.5% 78.7% 79.8% 77.6% 77.9% 78.5% 81.1%
- Global Delivery Centers 84.8% 84.4% 84.0% 81.7% 82.0% 83.1% 84.2%
- India 77.5% 77.8% 79.1% 77.0% 77.2% 77.8% 80.6%

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About Persistent

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We are a global solutions company delivering digital business acceleration and enterprise modernization for businesses across industries and geographies.

Industry Expertise & Solutions

Service Lines Digital Business Strategy

CX Innovation & Optimization Digital Product Engineering

Core IT Modernization

Data-Driven Business & Intelligence Identity, Access & Privacy

Outcomes Accelerate Time-to-Market Enable Business Agility Business Partner Unlock Banking Industrial Healthcare Software Ecosystem Growth Financial Life Sciences Hi-tech Services Maximize Value Creation Insurance Drive Enterprise Simplification

Confidential © 2020 Persistent Systems

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Thank you! [email protected]

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