# 1. Financial Performance ## A. Key Figures * Revenue: **$406.2 Mn** Q2 FY26 (+17.6% YoY, +4.2% QoQ) · **₹35,807.2 Cr** (+23.6% YoY) · **$1.6 Bn** annualized run rate * **EBIT Margin:** **16.3%** Q2 FY26 (+230 bps YoY, +80 bps QoQ) · **EBIT:** **₹5,837.4 Cr** (+43.7% YoY) * PAT Margin: 13.2% Q2 FY26 · PAT: ₹4,714.7M (₹471.47 Cr) (+45.1% YoY) · EPS: ₹30.3 (+43% YoY) * Other Income & FX: ₹58.9 Mn other income (↓ from ₹187.3 Mn) · ₹272 Mn FX gains (↑ from ₹188.7 Mn) * **Balance Sheet:** **₹2,495.7 Cr** cash & investments · **$475 Mn** forward contracts (avg. ₹87.8/$) * **Cash Flow:** **54 days** billed DSO (↓2 days) · **21 days** unbilled DSO (↑1 day) · **3%** OCF/PAT ratio ## B. Revenue Growth * **Sustained Momentum:** 22nd consecutive quarter of growth with trailing 12-month revenue above **$5 Bn**, reflecting durable demand and scalable execution. * **Growth Drivers:** Strong **4-year CAGR of 25%** and long-term **CAGR >17% since IPO** driven by leadership in AI, data, and software capabilities. * **Revenue Mix Dynamics:** Software license & support charges rose to **6% of revenue** from prior range of **3–5%**, expected to stabilize near current levels. * **Currency & Income Shifts:** Constant currency revenue grew **4% QoQ**, while lower mark-to-market gains offset FX tailwinds from rupee depreciation. ## C. Profit Margins * **Margin Acceleration:** EBIT margin expanded **230 bps YoY** and **80 bps QoQ**, surpassing prior targets and reflecting disciplined execution. * **Profitability Levers:** Margin gains driven by **pricing power, offshoring, resource mix optimization, and AI-enabled efficiency**, with all improvements cash-converted. * **Tech-Led Differentiation:** Higher realization rates on technology-intensive deals are reducing manpower dependency and boosting margins despite competition. * **Tax & EPS Trends:** Effective tax rate stable at **5%**, supporting EPS growth of **43% YoY** despite modest PAT expansion. ## D. Balance Sheet & Cash Flow * **Capital Efficiency:** ROCE (ex-cash) declined to **5%** from **8%**, likely due to timing of investments; strong cash balance supports strategic flexibility. * **Working Capital Discipline:** Billed DSO improved to **54 days**, demonstrating billing and collection efficiency, while unbilled DSO edged up modestly. * **FX Risk Management:** Significant **$475 Mn** forward cover in place at favorable rates, insulating near-term revenue from volatility. --- # 2. Deal Wins & Bookings ## A. Key Figures * TCV: $609.2M (quarterly) · $350.8M (new bookings) (+15% YoY) * ACV: $447.9M total · $254.4M from new bookings * **Client Expansion:** **4** clients >$75M (+1) · **12** >$20M (+2) · **25** >$10M (+4) · **56** >$5M (+13) · **191** >$1M (+7) ## B. TCV & ACV Trends * **Strong Underlying Momentum:** Robust ACV growth and existing business expansion driving TCV, with multi-year conversions enhancing revenue visibility. * **AI-Led Differentiation:** Proactive AI outreach securing a disproportionate share of client AI initiatives, boosting TCV and ACV conversion over multiple quarters. * **Sector Leadership:** BFSI leading deal wins and pipeline strength, with hi-tech showing strong follow-on momentum. * **Recognition Validates Positioning:** Named ISG Customer Experience Star Performer in six categories and awarded Everest Group’s Growth Honor of the Year for market-leading revenue growth. ## C. New Business * **Strategic Deal Wins:** Secured large multi-year engagements in high-tech (cloud infrastructure provider), AI (SASVA collaboration), energy tech (grid platform R&D center), and financial services (AI-driven transformation). * **Non-Competitive Wins:** Key financial services and wealth management clients selected Persistent without bidding, citing prior delivery success and trusted partnership. * **Healthcare Momentum:** Expanded footprint with top-tier clients including a global healthcare company and a major US non-profit health system, focusing on digital modernization and interoperability. * **Broad-Based Growth:** Performance driven by diversified client base with no concentration risk, underpinned by consistent execution and cross-sector agility. ## D. Client Expansion * **Deepening Client Relationships:** Significant expansion in mid- and high-tier clients, reflecting increased wallet share and strategic partnership depth. --- # 3. Vertical & Geography Mix ## A. Key Figures * **Industry Growth:** **+30%** BFSI · **+6%** Healthcare Life Sciences · **+5%** Software Hi-Tech * Regional Growth: **+19%** India · **+37.9%** Europe · **+19.8%** Rest of the World · **+15.4%** North America ## B. Industry Segments * **BFSI Momentum:** Sustained leadership in growth for six consecutive quarters, driven by **major deal wins** and broad-based expansion across fintech, banking, and financial services. * **Healthcare Recovery:** Return to growth after prior softness, with active client engagement despite **government spending headwinds** linked to the "big beautiful bill". * **Strategic Focus:** Prioritizing **deepening capabilities in core verticals** over new vertical expansion to maintain scale and execution excellence. ## C. Regional Revenue * **Europe Strength:** Robust double-digit growth fueled by large hi-tech client ramps, independent of BFSI performance, signaling diversification success. * **India Outperformance:** Strongest regional growth momentum, reflecting domestic market expansion and delivery scale-up. ## D. Healthcare Sub-verticals * **Sub-vertical Specialization:** Healthcare organized into **four distinct segments**—scientific instruments, medical devices, pharma, payer/provider—with dedicated teams and tailored strategies. * **Policy-Driven Opportunities:** Regulatory and funding shifts under the "big beautiful bill" are prompting clients to **re-optimize supply chains**, creating demand for efficiency-focused services. --- # 4. AI & Technology Leverage ## A. Key Figures * **Patents Filed (SASVA):** **20** new this quarter (**75** total) * **AI Agents (Internal):** **50+** launched across functions * **Top Customer Revenue Contribution:** **82%+** from top 100 clients ## B. AI Platforms & Strategy * **Strategic AI Framework:** Three-pillar platform strategy—**AI for Technology**, **AI for Business**, and **Enterprise Data Readiness**—drives end-to-end transformation and competitive differentiation. * **SASVA Platform Momentum:** Generative AI engineering platform enables **on-premise deployment** and **optimized GPU infrastructure**, with 20 new patents filed this quarter and measurable client impact in cost, speed, and growth. * **Ecosystem & Recognition:** Strategic partnerships with **Digital Ocean** and **Anthropic** expand AI solution depth; recognized as **emerging leader in Gartner’s GenAI Consulting Quadrant** and **leader in Everest Group’s 2025 Talent Readiness PEAK Matrix**. * **Responsible AI Leadership:** Successfully audited for **ISO 42001 certification**, reinforcing governance, ethics, and operational rigor in AI systems. ## C. Internal AI Use * **Operational AI Integration:** 50+ internal AI agents deployed in **delivery, finance, legal, and talent**, driving **measurable reductions in turnaround times** and modernizing operating models. * **AI-Ready Modernization:** Legacy data systems modernized for key clients using **Azure Fabric, Snowflake, and Databricks**, enabling scalable analytics and **year-on-year cost savings**. ## D. Client AI Adoption * **Domain-Specific Agentic Transformation:** AI for Business is redefining workflows in **banking (credit risk/fraud)**, **healthcare (drug discovery)**, and **customer onboarding**, with **AWS Bedrock-based agents** boosting productivity in diagnostics. * **Proactive AI-Led Renewal Strategy:** Despite AI not yet materially impacting renewals, company is actively engaging **top 100 clients** with AI propositions ahead of cycles to secure future growth. * **Pricing Resilience & Margin Impact:** AI reduces project scope and effort but is **not causing pricing deflation**; **AI-led deal wins and proprietary tools like SASVA** are key drivers of **tech segment margin improvement**. * **Market Evolution:** Industry shift toward **"service as a software"** with **outcome-based pricing** and bundled AI-led solutions reflects broader transformation in value delivery. * **Revenue Penetration Note:** AI-led revenues remain **below double-digit percentage of total revenue**, consistent with sector-wide trends. --- # 5. Talent & Utilization ## A. Key Figures * **Headcount:** **26,224** as of Q2 FY26 (+884 QoQ) * Utilization Rate: 88.2% (-50 bps QoQ) * Attrition (LTM): 13.8% (-10 bps QoQ) ## B. Headcount Trends * **Strategic Leadership Shift:** Promotion of Jaideep Dhok to COO centralizes oversight of delivery, talent, AI strategy, and global operations, signaling enhanced operational integration. * **Talent Development Acceleration:** Workforce upskilling scaled significantly, with **over 23,550 cloud certifications** and **8,300+ internal AI certifications** achieved, reinforcing future-ready capabilities. * **Geographic Reallocation:** India headcount grew meaningfully over the past year, reversing prior North America expansion trend, while offshore ratio held at **~85%**, deemed optimal. * **Recognition & Retention:** Talent ecosystem recognized with top industry awards, including **Newsweek’s America's Greatest Workplaces in Tech 2025** and **People Matters InfinIT Awards 2025** top-three ranking. ## C. Utilization & Productivity * **Stable Outlook Despite Dip:** Utilization declined modestly but is expected to stabilize in the **83–85% range**, supported by balanced demand-supply and agile deployment. * **AI-Driven Internal Efficiency:** 'Persistent AssIst' agentic framework recognized with **two CII National AI Awards 2025**, highlighting AI adoption for internal productivity gains. --- # 6. Client & Pricing Dynamics ## A. Key Figures * Top Client Revenue Growth: 23.4% (top 5) · 22.4% (top 10) · 22.7% (top 20) · 21.4% (top 50) ## B. Pricing Strategy * **Inflation-Linked Pricing:** Contracts increasingly include **COLA clauses** with customer buy-in, supporting margin resilience amid cost pressures. * **Tenure-Based Pricing:** Incremental pricing applied for long-tenured resources, reflecting value-based pricing discipline. ## C. Billing Realization * **Pricing Power Intact:** Billing rates and realization show consistent improvement, demonstrating pricing strength despite AI-driven efficiency gains. --- # 7. Risks & Tech Adoption ## A. Key Figures * **EBIT Margin Impact:** **+80 bps** from expired software licenses (non-recurring) · **+60 bps** from favorable currency · **+30 bps** from offshoring * **EBIT Margin Headwinds:** **–50 bps** from higher doubtful debt provisions · **–20 bps** from lower utilization · **–20 bps** from higher D&A ## B. Data Readiness * **AI Enabler:** Enterprise data readiness initiatives address critical barriers in quality, governance, and cost, enabling secure AI adoption through structured data foundations. * **Accelerators Driving Scale:** Proprietary platforms like **iAura** and **GenAI Hub** are actively helping **Fortune 500 clients** overcome data silos and accelerate Generative AI prototyping and deployment. * **Healthcare Deal Dynamics:** Recent segment challenges reflect normal lifecycle phases—ramp-up, offshoring, optimization—not underlying demand weakness. ## C. Software Cost Trends * **Margin Tailwinds Transient:** EBIT margin expansion in Q2 benefited from non-recurring cost savings and favorable currency, partially offset by structural headwinds. * **Software Cost Uncertainty:** Rising software expenses are tied to evolving deal models; long-term cost trajectory remains unclear despite growing **Software ARR** flow-through via platforms like **Salesforce**. ## D. Macro Uncertainty * **Resilient Performance:** Persistent delivered consistent results despite persistent macro and geopolitical headwinds, particularly in the US. * **Broad-Based Demand:** Customers are adapting, sustaining a diversified pipeline and strong deal wins across sectors. * **Execution as Differentiator:** Operational excellence is paramount—superior execution is expected to drive outperformance even in absence of macro recovery. --- # 8. Guidance & Outlook ## A. Key Figures * **Revenue Target:** **$2 Bn** by end-FY27 (next year) · **$5 Bn** aspiration over 4–5 years * **Margin Expansion:** **100 bps** improvement expected in FY26 · **100 bps** projected in FY27 · **200–300 bps** total aspiration by FY27 * **Wage Impact:** **180 bps** margin headwind from Oct 2025 increments · **80–100 bps** expected mitigation via levers ## B. Revenue Outlook & Segment Trends * **Confident Path to $2Bn:** Management affirms high conviction in reaching **$2 billion revenue target** next year, backed by strong ACV/TCV momentum and stable macro assumptions. * **Longer-Term Ambition:** Aspires to **$100M/quarter per sub-vertical**, supporting a **$5 billion revenue vision** over the medium term. * **Healthcare Recovery in Sight:** Segment expected to return to growth, driven by recent offshoring wins and a robust deal pipeline. ## C. Margin Trajectory & Cost Management * **Near-Term Margin Pressure:** Anticipates **temporary 180 bps headwind** from annual wage hikes, with meaningful offset expected through operational levers. * **Sustained Margin Progression:** On track for **100 bps improvement in both FY26 and FY27**, maintaining alignment with the **200–300 bps multi-year aspiration**. * **Margin Levers Active:** Offshoring, utilization gains, sub-con rationalization, SG&A optimization, and **ESOP cost reduction** are key tools enabling margin resilience. ## D. Growth & Strategic Priorities * **Growth Over Margin Maximization:** Company to prioritize **strategic investments and expansion**, especially in AI, even at the expense of near-term margin peak. * **Post-FY27 Focus Shift:** Beyond FY27, **growth will become the primary engine**, though margin optimization will continue where feasible. * **Scaling with Speed:** Strategy emphasizes **accelerated go-to-market execution** and deep client partnerships to outpace competition.