Persistent Systems (PSYS IN) – Event Update – Europe expansion to begin the next growth phase – BUY
Published on 29 Jun 2026
The investments (USD 1.6bn) in Nagarro is largely complementing and scaling the core business dynamics of PSYS, in terms of expanding new verticals and geographies, where PSYS has marginal presence. More importantly, the target entity shares a similar culture and service lines to PSYS’ core business, which is a positive in our view. However, we believe there is a slight business risk which comes along with the vertical presence, barring 2-3 verticals, the near-term growth within other business units remains a challenge (mid-single-digit). PSYS is largely pivoted on the build side (platform engineering), while Nagarro is dominated on the managed side that results in having higher T&M practice (around 60% mix). Hence, there is a notable difference in growth/margin profile of PSYS and Nagarro. Although there are a few (10 accounts) client overlapping between them, the management is excited and confident of scaling the potential accounts through cross-selling and up-selling opportunities. Retain BUY.
