Persistent Systems net profit rises by Rs 88.14 crore in Q2 2018-19

Tech firm Persistent Systems Sunday reported a 7 per cent rise in its consolidated net profit to Rs 88.14 crore for the second quarter ended September 2018.

The company had registered a net profit of Rs 82.62 crore in the July-September period of 2017-18.

Total income of the company increased to Rs 858.78 crore in the September quarter of 2018-19 as against Rs 794.89 crore in the year-ago period, it said in a regulatory filing.

Segment-wise, revenue from Technology services were up 11 per cent and that of Alliance was up 18.5 per cent. Its revenue from Accelerite (products) during the quarter fell by 27 per cent.

The company said it recognised itself into these three business units from April 1, 2018, which form the operating segments for revenue break-up.

Persistent said its wholly owned subsidiary Persistent Systems Inc has completed the acquisition of Herald Technologies Inc, a US-based healthcare start-up on August 24, 2018, and the second quarter results also include business from Herald.

Among others, the company said that it has deposited with IL&FS group firm the interest on which has not been defaulted by the latter and it will continue to monitor the related matters.

"As of September 30, 2018, Persistent Systems Limited had deposits of Rs 430 million with the financial institution's Infrastructure Leasing & Financial Services Ltd (IL&FS) and IL&FS Financial Services Ltd. These are due for maturity from January 2019 to June 2019. As of September 30, 2018, there have been no defaults in payment of interest on the aforesaid deposits," it said.

Accordingly, the management of the Persistent Systems believes that there is no immediate need to recognize any impairment on these deposits.

The company will continue to monitor the developments in this matter for the purpose of determining the financial reporting impact if any," it said.

In August, credit rating agency ICRA had significantly downgraded the IL& FS Group's rating and subsequently, the government and various regulators have intervened in the matter.

"While our digital numbers are lower than expected, we see good growth opportunities across all segments of our business and multiple new projects started this quarter that will deliver long-term revenue growth," said Anand Deshpande, Chairman and Managing Director, Persistent Systems.

The shortfall in digital revenue can be attributed to the short closure of one of our projects and a shift in the business mix as some projects moved offshore, he said.

"We continue to invest in new technologies and in enhancing domain and consulting skills in our customers' geography as can be seen from the acquisition of Herald Health and the setting up of Partners Healthcare Pivot Labs," Deshpande said.

Persistent is a global company specialising in software products, services and technology innovation.