Persistent Systems nets over 90% revenue from digital offering

Mid-tier software player Persistent Systems will do away with segmental reporting on digital revenue by the end of the year, as it feels the system is not relevant anymore, and also over 90 percent of its top line comes from this offering, a top official has said. The Pune-based company will continue to push revenue to USD 1-billion per year-mark through organic and inorganic growth, but cannot put a timeline for achieving the target, chief executive Christopher O'Connor said on Wednesday.

Domestic software companies report this number normally, which represents their work in the new age business line and usually report faster revenue growth in the segment. It can be noted that domestic Brokerage Emkay had said the 8.1 percent growth that Persistent reported in digital revenue in the September quarter was "disappointing".

The company on Tuesday reported a 2.3 percent dip in the September quarter net at Rs 86 crore. "By the end of the year, I will remove the digital category. Over 90 percent of the work we do is in digital and I do not understand the need to break it up at all...the era of reporting digital is behind," he told PTI over a call.

"Such a practice is not followed in any other market," said O'Connor, who joined the company in March from IBM. The focus will be to grow across categories and solutions he added. He attributed the 90 bps drop in the pre-tax margin to 8.9 percent to a nearly USD 500,000 investment in re-branding and also to some senior-level hires done under him. But said the target to reach 11 percentage margin is on.

The company achieved a revenue of USD 125 million in the September quarter and the new CEO said he is tracks the USD 1-billion topline target, but refused to give a timeline on the same. He hinted at the company, which has a cash pile of USD 200 million and adds USD 10 million per quarter, will be looking for medium size acquisitions of up to USD 40 million to elevate the revenue.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)