Persistent Systems Q3FY26 Earnings: Persistent Systems’ Q3FY26 results delivered a blend of short-term margin pressure and long-term growth confidence. The mid-tier IT services company reported a 6.8% quarter-on-quarter (QoQ) fall in consolidated net profit, largely due to a one-off impact from the implementation of India’s new labour codes.
Despite this, revenue growth, deal wins, and management commentary signal underlying business strength.
Profit Impacted by Labour Code Adjustment
For the December 2025 quarter, Persistent Systems posted a net profit of ₹439.45 crore, compared with ₹471.47 crore in Q2FY26. The decline was primarily driven by exceptional expenses related to revised wage definitions under the new labour framework.
The one-time cost included ₹52.76 crore towards gratuity provisions and ₹36.27 crore for long-term compensated absences, which temporarily dented profitability and operating margins.
Revenue Growth Stays Firm
On the positive side, revenue from operations rose 5.5% QoQ to ₹3,778.21 crore, highlighting sustained client spending on digital engineering, cloud, and data-led services. Dollar revenue increased 4% sequentially to $422.5 million, marking the company’s 23rd consecutive quarter of revenue growth.
Persistent Systems Q3FY26 Earnings
| Metric | Q3FY26 | Q2FY26 | QoQ change |
|---|---|---|---|
| Revenue (₹ crore) | 3,778.21 | 3,580.72 | +5.5% |
| Net Profit (₹ crore) | 439.45 | 471.47 | -6.8% |
| EBIT (₹ crore) | 542.75 | 583.74 | -7.0% |
| EBIT Margin | 14.4% | 16.3% | -190 bps |
| Dollar Revenue ($ mn) | 422.5 | 406.2 | +4.0% |
Order Book and Dividend Boost Sentiment
The company reported strong order bookings, with Total Contract Value (TCV) of $674.5 million and Annual Contract Value (ACV) of $501.9 million, reflecting healthy demand for large, complex digital transformation engagements.
Adding to investor optimism, the board announced an interim dividend of ₹22 per equity share, with January 27, 2026 set as the record date.
Management Outlook
CEO Sandeep Kalra stated that adjusted EBIT margin stood at 16.7%, excluding the one-time labour code impact of around 2.3%. He highlighted deeper involvement in strategic client programs and rising adoption of Agentic AI, both for customers and internal productivity.
While Persistent Systems Q3 profit decline was driven by regulatory adjustments, the company’s consistent revenue growth, robust deal pipeline, and dividend payout underline its solid long-term growth story in the Indian IT sector.
Disclaimer:
This article is for informational and educational purposes only and should not be construed as investment advice, financial advice, or a recommendation to buy, sell, or hold any securities. The views and analysis expressed herein are based on publicly available information and company disclosures believed to be reliable at the time of writing; however, no guarantee is made as to their accuracy or completeness. Market conditions, company fundamentals, and regulatory factors may change without notice. Readers are advised to conduct their own research and consult with a qualified financial advisor before making any investment decisions. The author and publisher shall not be responsible for any losses arising from the use of this information.
Yogesh Kolhe is a market and business news author with a focus on the automobile sector and gold and silver price movements, offering readers practical insights into industry and market trends.
