Stock market tip: Experts expect this stock to rise 10 pct in one month
Persistent Systems share price is expected to go 10 per cent up in short-term perspective means in one month time, say stock market experts.
Stock market investors are in wait and watch mode these days as they are looking for some strong cue either from the Lok Sabha Elections 2019 or from the global markets. But, there are some stocks that don't need any cue as their fundamentals and technicals are quite strong. Persistent Systems is one of such stock. Persistent Systems had tough FY19 on revenue front as the company saw lot of challenges related to subdued growth in digital business, weakness in Top client and softness in IP business. Revenue grew 2.2 per cent QoQ, which is much lower than its peers. However, margin managed to improve 100bps in FY19 due to better execution and benefit from currency. Stock market experts are of the opinion that Persistent Systems share price is expected to go 10 per cent up in short-term perspective i.e. in one month's time. Currently, Persistent Systems share price is oscillating around Rs 630 per stocks and can show around Rs 699 per share levels in one month.
Giving details about the fundamentals supporting Persistent Systems share price rise Niharika Ojha, Research Analyst at Narnolia Financial Advisors said, "We expect Persistent digital business, which has posted healthy growth in last two quarter (increasing 4.3 per cent QoQ on top of 6.4 per cent QoQ growth in 3QFY19), to continue to grow and reach 25 per cent YoY growth going head. However, company’s continued dependence on its top client (IBM revenue which declined 15.4 per cent QoQin 4QFY19) and continued decline in IP led revenue is clearing showing some concern on revenue visibility for FY20. We expect IP led revenue to post laggard growth in FY20. On margin front we expect improvement in pricing and change in business mix (work moving to offshore) to support the margins however continued investment to meet the demand will offset some portion of the margin, thus we expect margin to improve 50bps in FY20."
On her suggestion to the stock market investors in regard to Persistent Systems shares Niharika Ojha of Narnolia Financial Advisors said, "The Persistent Systems shares are an upside potential for around 9 per cent and a stock market investor can buy the counter for the target of Rs 699/shres levels in one-month perspective."
However, Prakash Pandey, Head of Research at Fairwealth Securities said that the stock market investors should wait for some correction of around 15-20 rupee in the counter citing, "Currently, from technical perspective, Persistent Systems share price is oscillating in the range of 575 to 650. Since, its current price is around Rs 630/shares, we can expect some downside movement at current levels and the country may show around Rs 615-620 levels. An investor can buy the counter at this levels taking a stop loss of Rs 575 for the first target of Rs 650 and then for Rs 720 per shares," said Prakash Pandey of Fairwealth Securities.
Hence, if a stock market investor decides to invest in Persistent Systems shares, then he or she can expect around 10 per cent return in one month.