Persistent Systems Q1 net profit up 2.5% to Rs 75 cr, to acquire PARX

IT firm Persistent Systems on Friday said its consolidated net profit increased by 2.5 per cent to Rs 75 crore for the quarter ended June.

The company has also announced the acquisition of PARX for 8.5 million Swiss Franc (about Rs 57.67 crore) in cash.

Persistent's net profit stood at Rs 73.28 crore in the June quarter last fiscal. Its revenues grew 3.7 per cent to Rs 728 crore in the quarter under review from Rs 701.77 crore in the April-June 2016 period.

In dollar terms, Persistent's revenue was up 7.8 per cent to USD 112.97 million.

"Aggressive deployment of new technology is creating new opportunity for us as every business is exploring ways to become software driven," Persistent Systems Chairman and MD Anand Deshpande said.

He added that businesses are investing in new technology areas like Internet of Things (IoT), Machine Learning, Bots, and Intelligent Process Automation that is evident from its recent wins.

Sequentially, net profit was up 3.2 per cent from Rs 72.7 crore, while revenue was almost flat compared to Rs 727.1 crore in the January-March 2017 quarter.

Deshpande said PARX acquisition would bring a deep business domain understanding that complements its technology expertise.

"This strengthens our presence in DACH (Germany, Austria and Switzerland region) and across Europe," he added.

According to a BSE filing, "the enterprise value payable for the acquisition of 100 per cent shares of PARX is CHF 8.5 million, subject to customary adjustments for working capital".

Additionally, an amount of up to CHF 7.5 million may be payable to management employees over three years which is contingent on performance and retention of such management employees, it added.

Incorporated in 2001, PARX has offices in Zurich, Lausanne, Hamburg, Berlin and Munich. Its revenues stood at CHF 8 million at the end of December 2016.

It is expected that the acquisition will be completed within 3-4 weeks or as soon as thereafter subject to satisfaction of customary closing conditions, the filing said.

Persistent had 9,401 employees at the end of the first quarter. Its attrition rate stood at 15.5 per cent.

North Americas accounted for 85.5 per cent of the company's revenues, while Europe and India accounted for 5.9 per cent each. Rest of world contributed 2.7 per cent of the revenue during the quarter.