Despite macro uncertainty weighing on demand, Persistent Systems CEO Sandeep Kalra said the company remains on track to achieve its $2 billion revenue target, implying 3.5% quarter-on-quarter growth and 15% year-on-year growth in FY27—still ahead of the industry, though slower than Street expectations.
“We prefer to stay ambitious rather than lower expectations,” he said in an interaction with TOI after the earnings call on Wednesday.Persistent aims to become a $2 billion enterprise by FY27 and scale further to $5 billion by FY31 by sharpening its focus on AI-led execution, tuck-in acquisitions and deeper engagement with global clients.Kalra also reframed the debate around AI-led deflation. “Instead of focusing only on deflation in existing work, it’s important to look at new opportunities AI creates,” he said, pointing to use cases in pharma where AI can significantly accelerate drug discovery timelines.The company reported a steady but slightly softer March quarter, with revenue at $436 million, up 3.2% sequentially and 16.2% year-on-year. In constant currency, revenue grew 3.4%. For FY26, revenue rose 17.4% to about $1.6 billion. EBIT margin stood at 16.3%, down 40 basis points sequentially.A key differentiator, Kalra emphasised, is the company’s platform-led approach. “Our licensing revenues are not just pass-through,” he said.
“They are tied to platforms and products we’ve built over time… and are often embedded within our services.” As AI adoption rises, he added, “the combination of technology and human effort will increase, and both components will grow together.”Addressing concerns around a sequential dip in large accounts, Kalra dismissed any suggestion of demand weakness. “Our top accounts have scaled significantly… and as part of that, we’ve committed to cost savings,” he said, noting that offshoring-led efficiencies can create short-term fluctuations.
However, growth remains robust, with top clients expanding at around 20% year-on-year, reflecting broad-based momentum.On AI-led disruption, Kalra described the shift as structural but manageable. “This is not just a cost cycle; it’s a capability cycle,” he said, adding that companies investing early in capabilities stand to gain disproportionate share. This focus is also shaping margins, with the company maintaining a near-term aspiration of 16–17% as it continues to reinvest in the business.Kalra also signalled a willingness to disrupt the company’s own model if needed. “If we don’t disrupt ourselves, someone else will,” he said, underlining a strategy anchored in capability building, adaptability and long-term growth.
