Persistent Systems Limited — Investor Presentation 2021

Oct 26, 2021

Analyst Presentation

Quarter ended September 30, 2021

October 26, 2021

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 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.

We are Persistent.

A trusted Digital Engineering and Enterprise Modernization partner.

\$182.3M	₹1,618M	15,879	\$648.1M	\$3.8B*
Q2FY22 Revenue	Q2FY22 PAT	Employees	TTM Revenue	Market cap
+34.0%	+58.6%	+46.8%	+23.8%	+174.4%
Y-o-Y	Y-o-Y	Y-o-Y	Y-o-Y	Y-o-Y

Strong global presence with 15,879 team members across key geographies

Our core strengths in Digital Engineering fuel the next wave of transformation for our clients

Delivering consistent growth in revenue and margins

Quarterly Revenue (\$ M) YoY Growth % QoQ Growth %

Quarterly Revenue, QoQ and YoY Growth EBIT and PAT Margin %

Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22

On account of broad-based growth across all industry segments

Quarterly Revenue (\$ M), % YoY Growth

* This chart excludes revenue from the top customer

Leading to lower client concentration and greater predictability from other large accounts

Client Concentration

Top 10 clients as % of total revenue

Large Client Count >\$5M Annual Revenue

Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22

Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22

And significant shareholder value creation

Persistent's Total Shareholder Return

Persistent 1-Year Stock Performance* vs NIFTY 50 & NIFTY IT Index

Performance Highlights

Sandeep Kalra Chief Executive Officer and Executive Director

Financial highlights for Q2 FY22

136.1 166.82 182.32 Q2FY21 Q1FY22 Q2FY22 Revenue (\$ million) 10,077.5 12,299.3 13,512.5 Q2FY21 Q1FY22 Q2FY22 Revenue (₹ million) 1,217.9 1,665.1 1,873.1 Q2FY21 Q1FY22 Q2FY22 EBIT (₹ million) 12.1% 13.5% 13.9% 1,019.9 1,512.5 1,617.5 Q2FY21 Q1FY22 Q2FY22 PAT (₹ million) 10.1% 12.3% 12.0% 9.3% Q-o-Q 34% Y-o-Y 9.9% Q-o-Q 34.1% Y-o-Y 12.5% Q-o-Q 53.8% Y-o-Y 6.9% Q-o-Q 58.6% Y-o-Y Margin % Margin %

TCV and ACV for Q2 FY22

Total Contract Value* (\$ million)

Total Contract Value (New, \$ million)

Annual Contract Value* (\$ million)

Annual Contract Value (New, \$ million)

TTM performance

Notable News and Achievements

We announced the acquisition of SCI, Fusion 360 & Shree Partners on September 29th

	More than 30 years of Payments solutions experience in North America region	More than 16 years as a Digital Transformation & IT Solutions provider across US and Europe
Expertise	Domain Consulting capabilities in Payments ecosystem ACH, Check Processing, Corporate Payments, Payments Gateway, SWIFT, SEPA , Zelle, RTP, etc. Specialized Digital Engineering, implementation & support for IBM FTM and other payment related products, platforms	Cloud and Digital Operations \ Application Development \ Intelligent Automation \ Data, Analytics, AI & ML \
Revenue	US\$ 17.1M for FYE Dec 2020	US\$ 7.6M for FYE Mar 2021
Client Base	~10 marquee customers from top banks in North America	Clients across US and Europe in BFSI, Travel & Hospitality
Employees	90+, all based in North America	200+, largely in National Capital Region (NCR), India
Geographies	North America, headquartered in Charlotte	North America, Europe & NCR, India

Strategic rationale for acquisition of SCI, Fusion360 and Shree Partners

Enrich Industry & Service Lines Capabilities

• \ SCI significantly bolsters Payments expertise, adding Payments Domain Consultants in North America
• \ Shree Partners strengthens our existing capabilities in cloud, infrastructure, data, and AI / ML
• \ Founders, and management teams, will be retained and are 30+ year industry veterans with deep payments and technology backgrounds

customer.

Deepen and Broaden Client Portfolio

• \ SCI deepens our client portfolio and relationships with ~10 marketleading NA Banks, with many in Top 20. Opens-up new opportunities for mining existing Persistent accounts and expands value proposition for the SCI clients to include Persistent's capabilities
• \ Shree Partners consolidates our position in a strategic account and adds to the customer base

Expand Geographic Footprint

• \ SCI helps extend our footprint in Charlotte, one of the largest US banking hubs
• \ Shree Partners adds a new point of presence in National Capital Region (NCR), India

We acknowledge our employee's hard work and dedication that has been the bedrock of our industry-leading growth and shareholder returns over the past several quarters.

We are pleased to offer our global employees the opportunity to participate in this ESOP, thereby providing them the opportunity to participate in the value created for our shareholders as co-owners in the Company.

Sandeep Kalra Chief Executive Officer and Executive Director

Names Persistent to "Best Under A Billion" 2021 List

Highlighting companies under \$1 billion in revenue with consistent top-line and bottom-line growth.

"While we are a well-recognized brand across India, US and Europe, being recognized throughout Asia-Pacific and for these exacting criteria is very gratifying. We continue to increase our global presence and pride ourselves on our high standards of governance, so to be included in the Forbes Asia list is a great achievement. Our strong performance and growth would not be possible without the ongoing support and trust of our clients as well as efforts of our extremely dedicated employees."

Sandeep Kalra Chief Executive Officer and Executive Director

Learn More

Key wins for the quarter

Software, Hi-Tech & Emerging Industries

Migrating brand websites to Shopify to expand direct-to-consumer sales channel and modernization of data analytics for a US-based beverages company.

Upgrading customer's product from legacy platform to AWS and enhancing the product roadmap for an employee engagement solutions provider.

Transforming and modernizing cloudbased product for a leading tax preparation and financial technology provider.

Banking, Financial Services & Insurance

Establishing a Global Technology Center to deliver enterprise-wide digital transformation for a global third-party insurance administrator.

Building a next-gen savings platform to provide competitive advantage and accelerate revenue growth for a US government and health savings facilitator.

Developing and launching a cloud-native neo-bank based in the United Kingdom and Switzerland.

Building a patient engagement platform using leading low code development solution for a US healthcare provider.

Aggregating clinical data sources in a Microsoft Azure based data lake for a contract research organization.

Developing a Salesforce-based home care solution for the EMEA region, including a customer service portal and patient portal, for a multinational healthcare company.

Continued accolades from leading IT analysts

Leader in Agile Development in ISG Provider Lens™: Next-Gen Application Development & Maintenance Services UK & U.S.

Leader in HyperIntelligent Automation Services — Small and Medium Service Providers

Recognized in ISG Booming 15 category for 6 consecutive quarters

Other highlights

Talking Point with Persistent Systems' CEO Sandeep Kalra	Persistent's Salesforce Practice CSAT score of 5/5 Awarded Rising Partner in Salesforce France 2020-21	Preetpal Singh: Dispelling 4 Common Myths Related to Business Developers
Learn More	Learn More	Learn More
		Suresh Prabhu: Crafting Digital Journeys, Powering the
Persistent Announces a Dedicated Payments Business Unit and Expands Cloud Capabilities through Strategic Acquisitions	Anand Krishnan: Demystifying IT Modernization and Digital Transformation	Next-Generation of Careers
Learn More	Learn More	Learn More

Financial Details

Sequential Q2FY22 vs Q1FY22

				Expenses / Sales %	Expenses / Sales %
Particulars	Q2FY22	Q1FY22	Change QoQ	Q2FY22	Q1FY22
Revenue (\$ M)
Services	159.51	144.93	10.1%
IP Led	22.81	21.89	4.2%
Revenue (\$ M)	182.32	166.82	9.3%
Avg. Exchange Rate ₹ /US\$	74.11	73.73	0.5%
Revenue (₹ M)	13,512.49	12,299.26	9.9%
Cost of Revenue	₹ M	₹ M
Employee Related Expenses	8,783.68	7,920.82	10.9%	65.0%	64.4%
Purchase / Royalty	171.45	144.35	18.8%	1.3%	1.2%
Project related Travel Expenses	26.90	107.91	-75.1%	0.2%	0.9%
Total Direct costs	8,982.03	8,173.08	9.9%	66.5%	66.5%
Gross Profit	4,530.46	4,126.18	9.8%	33.5%	33.5%
Sales & Marketing Exps	1,167.88	1,101.31	6.0%	8.6%	9.0%
Admin. & Other Exps	1,105.21	995.36	11.0%	8.2%	8.1%
Doubtful Debt Provision	(6.67)	(20.69)	-67.8%	0.0%	-0.2%
CSR Activities	20.10	35.00	-42.6%	0.1%	0.3%
Total SGA	2,286.52	2,110.98	8.3%	16.9%	17.2%
EBITDA	2,243.94	2,015.20	11.4%	16.6%	16.4%
Depreciation	168.12	133.40	26.0%	1.2%	1.1%
Amortization	202.71	216.69	-6.5%	1.5%	1.8%
EBIT	1,873.11	1,665.11	12.5%	13.9%	13.5%
Other Income / (Loss)	292.88	256.38	14.2%	2.2%	2.1%
Exchange Gain/(Loss)	10.33	109.03	-90.5%	0.1%	0.9%
PBT	2,176.32	2,030.52	7.2%	16.1%	16.5%
Tax	558.79	518.04	7.9%	4.1%	4.2%
PAT	1,617.53	1,512.48	6.9%	12.0%	12.3%

YoY Comparison Q2FY22 vs Q2FY21

				Expenses / Sales %	Expenses / Sales %
Particulars	Q2FY22	Q2FY21	Change YoY	Q2FY22	Q2FY21
Revenue (\$ M)
Services	159.51	113.99	39.9%
IP Led	22.81	22.10	3.2%
Revenue (\$ M)	182.32	136.09	34.0%
Avg. Exchange Rate ₹ /US\$	74.11	74.05	0.1%
Revenue (₹ M)	13,512.49	10,077.47	34.1%
Cost of Revenue	₹ M	₹ M
Employee Related Expenses	8,783.68	6,428.81	36.6%	65.0%	63.8%
Purchase / Royalty	171.45	115.55	48.4%	1.3%	1.1%
Project related Travel Expenses	26.90	32.26	-16.6%	0.2%	0.3%
Total Direct costs	8,982.03	6,576.62	36.6%	66.5%	65.3%
Gross Profit	4,530.46	3,500.85	29.4%	33.5%	34.7%
Sales & Marketing Exps	1,167.88	901.26	29.6%	8.6%	8.9%
Admin. & Other Exps	1,105.21	817.78	35.1%	8.2%	8.1%
Doubtful Debt Provision	(6.67)	52.52	-112.7%	0.0%	0.5%
CSR Activities	20.10	71.57	-71.9%	0.1%	0.7%
Total SGA	2,286.52	1,843.13	24.1%	16.9%	18.3%
EBITDA	2,243.94	1,657.72	35.4%	16.6%	16.4%
Depreciation	168.12	115.08	46.1%	1.2%	1.1%
Amortization	202.71	324.71	-37.6%	1.5%	3.2%
EBIT	1,873.11	1,217.93	53.8%	13.9%	12.1%
Other Income / (Loss)	292.88	207.77	41.0%	2.2%	2.1%
Exchange Gain/(Loss)	10.33	(50.59)	-120.4%	0.1%	-0.5%
PBT	2,176.32	1,375.11	58.3%	16.1%	13.6%
Tax	558.79	355.25	57.3%	4.1%	3.5%
PAT	1,617.53	1,019.86	58.6%	12.0%	10.1%

YoY Comparison H1FY22 vs H1FY21

				Expenses / Sales %	Expenses / Sales %
Particulars	H1FY22	H1FY21	Change YoY	H1FY22	H1FY21
Revenue (\$ M)
Services	304.44	222.23	37.0%
IP Led	44.70	44.88	-0.4%
Revenue (\$ M)	349.14	267.11	30.7%
Avg. Exchange Rate ₹ /US\$	73.93	74.84	-1.2%
Revenue (₹ M)	25,811.75	19,991.32	29.1%
Cost of Revenue	₹ M	₹ M
Employee Related Expenses	16,704.50	12,608.21	32.5%	64.7%	63.1%
Purchase / Royalty	315.80	507.89	-37.8%	1.2%	2.5%
Project related Travel Expenses	134.81	106.89	26.1%	0.5%	0.5%
Total Direct costs	17,155.11	13,222.99	29.7%	66.5%	66.1%
Gross Profit	8,656.64	6,768.33	27.9%	33.5%	33.9%
Sales & Marketing Exps	2,269.19	1,763.06	28.7%	8.8%	8.8%
Admin. & Other Exps	2,100.57	1,610.57	30.4%	8.1%	8.1%
Doubtful Debt Provision	(27.36)	105.62	-125.9%	-0.1%	0.5%
CSR Activities	55.10	167.00	-67.0%	0.2%	0.8%
Total SGA	4,397.50	3,646.25	20.6%	17.0%	18.2%
EBITDA	4,259.14	3,122.08	36.4%	16.5%	15.6%
Depreciation	301.51	224.88	34.1%	1.2%	1.1%
Amortization	419.41	650.52	-35.5%	1.6%	3.3%
EBIT	3,538.22	2,246.68	57.5%	13.7%	11.2%
Other Income / (Loss)	549.26	487.09	12.8%	2.1%	2.4%
Exchange Gain/(Loss)	119.36	(138.22)	-186.4%	0.5%	-0.7%
PBT	4,206.84	2,595.55	62.1%	16.3%	13.0%
Tax	1,076.83	675.61	59.4%	4.2%	3.4%
PAT	3,130.01	1,919.94	63.0%	12.1%	9.6%

Balance Sheet

Particulars	As on September 30, 2021	As on March 31, 2021	As on September 30, 2020
Assets
PPE and Intangible assets	5,149.15	4,691.23	4,313.68
Non-Current Assets	4,477.21	1,613.85	1,506.74
Cash and Investments	18,704.34	19,830.98	16,932.62
Other Current Assets	11,903.89	10,519.18	9,867.43
Total	40,234.59	36,655.24	32,620.47
Equity and Liabilities
Equity	30,934.43	27,956.66	25,691.74
Non-Current Liabilities	1,209.51	1,001.38	737.88
Current Liabilities	8,090.65	7,697.20	6,190.85
Total	40,234.59	36,655.24	32,620.47

	Nos. / %	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
	Revenue from Operations, USD M	182.3	166.8	152.8	146.1	136.0	566.0	501.6
e u	% Q - o -Q growth	9.3%	9.2%	4.6%	7.4%	3.9%
n e v e	% Y - o -Y growth	34.0%	27.3%	20.3%	12.9%	8.4%	12.9%	4.3%
R	Revenue from Operations, INR M	13,512	12,299	11,134	10,754	10,077	41,879	35,658
	% Q - o -Q growth	9.9%	10.5%	3.5%	6.7%	1.7%
	% Y - o -Y growth	34.1%	24.1%	20.2%	16.5%	13.9%	17.4%	5.9%

x	Description / %	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
s s Mi s g e e n n u	Services	87.5%	86.9%	85.1%	81.9%	83.8%	83.4%	79.6%
Offeri si n e u v B e	IP Led	12.5%	13.1%	14.9%	18.1%	16.2%	16.6%	20.4%
R	Total	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
e u	Description / %	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
n e v	BFSI	30.7%	30.8%	30.1%	29.5%	31.9%	30.8%	29.5%
e R x Mi nt	Healthcare & Life Sciences	21.2%	20.5%	19.3%	19.1%	19.3%	19.3%	18.9%
e m g	Software, Hi -Tech & Emerging Industries	48.1%	48.7%	50.6%	51.4%	48.8%	49.9%	51.7%
e S	Total	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%

Geography Revenue Mix Description / % Q2FY22 Q1FY22 Q4FY21 Q3FY21 Q2FY21 FY21 FY20 North America 78.7% 78.9% 79.2% 81.1% 82.9% 80.8% 81.0% Europe 8.8% 9.5% 10.0% 8.8% 7.6% 9.2% 9.5% India 10.5% 9.8% 8.9% 8.6% 8.1% 8.4% 7.4% ROW 2.0% 1.8% 1.9% 1.5% 1.4% 1.6% 2.1% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

n o	Description / %	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
e ati u ntr n e	Top 1	16.9%	17.0%	17.9%	18.5%	19.4%	18.4%	22.0%
v e e c R n	Top 5	35.8%	36.5%	36.4%	37.8%	41.6%	38.7%	43.2%
o C	Top 10	45.4%	46.7%	46.3%	47.0%	50.5%	47.7%	51.7%

y er	Description / %	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
v eli s D	Global Development Centers	30.4%	31.4%	30.4%	30.5%	33.1%	31.8%	31.5%
er y nt b e e	India	57.1%	55.5%	54.7%	51.4%	50.7%	51.6%	48.1%
C u n e	IP Led	12.5%	13.1%	14.9%	18.1%	16.2%	16.6%	20.4%
v e R	Total	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%

d e	Nos.	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
Bill s nt e Cli	Services	596	568	558	530	487	722	653
	IP Led	130	132	140	142	135	239	257

Includes one-time clients with overlap across business offerings.

nt e	Nos.	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
m nt e e z e g Si Cli a	Large > USD 5M	22	21	17	17	16	17	11
g n E	Medium, USD 1M to USD 5M	84	76	66	65	63	66	61

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

	Nos.	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
s er b m	Technical	14,657	13,833	12,706	11,533	10,001	12,706	9,835
u N e	Sales and Business Development	296	308	273	277	268	273	263
pl o e P	Others	926	763	701	628	551	701	534
	Total	15,879	14,904	13,680	12,438	10,820	13,680	10,632

er M* P	USD / Per Person Month	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
ar P e d e u n n e Li e v	Global Delivery Centers	16,544	17,004	16,603	16,790	16,993	16,851	16,987
Bill e R	India	4,307	4,286	4,203	4,204	4,304	4,250	4,428
n o e at	%	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
Attriti R	TTM Basis	23.6%	16.6%	11.7%	10.3%	10.6%	11.7%	14.3%
d e L	Nos.	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
P I	IP Led Person Months	4,000	3,918	3,546	3,606	3,893	15,076	17,954
O	Nos.	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
S D	Days	55	54	55	57	63	55	65

Description / Nos. / %	Q2FY22	Q1FY22	Q4FY21	Q3FY21	Q2FY21	FY21	FY20
Billable Person Months	33,212	30,807	28,670	25,342	23,006	99,264	81,287
- Global Delivery Centers	3,840	3,480	3,345	3,104	3,086	12,595	11,202
- India	29,372	27,327	25,325	22,238	19,920	86,669	70,085
Billed Person Months	27,503	24,676	22,686	20,530	18,680	79,357	63,820
- Global Delivery Centers	3,354	3,080	2,794	2,651	2,647	10,687	9,305
- India	24,149	21,596	19,892	17,879	16,033	68,670	54,516
Linear Utilization
Blended	82.8%	80.1%	79.1%	81.0%	81.2%	79.9%	78.5%
- Global Delivery Centers	87.3%	88.5%	83.5%	85.4%	85.8%	84.8%	83.1%
- India	82.2%	79.0%	78.5%	80.4%	80.5%	79.2%	77.8%

See Beyond, Rise Above