MANAGEMENT MEET
Persistent Systems: Persistence above subsistence
For long, capital markets have allowed the mid-cap status of Persistent Systems to cloud, if not eclipse, its indisputable edge in offering productised service solutions in a market dominated by humdrum body shops and back offices. Sudhir Raikar takes a closer look at the firm's inimitable ethos, radical evolution and self-effacing evangelism in this tête-à-tête with Founder & CEO Dr. Anand Deshpande.
Picture this back-in-time scenario for a moment: It's the time of the nervous nineties in India, conspicuously marked by grave political uncertainty and economic downturn. A non-conformist in his mid-twenties, a B. Tech in Computer Science from IIT Kharagpur, with a doctorate in object databases from the Indiana University and a prolific 18-month database engineering stint with HP Labs in Palo Alto, bootstraps a boutique firm in the understated Indian city of Pune, specialising in deeper dives into database internals. Consciously retaining focus on the database space to protect the cocoon of his tech acumen, he makes Independent Software Vendors (ISVs) his target audience unlike the Indian IT vendor crowd which is heavily focused on custom application development for different verticals.
Taking a cue from the fact that data is infinite in nature, the firm makes the symbol of infinity its corporate logo and the concept of data persistence – that once written to disk, data becomes stable and recoverable over time and across systems – inspires the gloriously graphic name of Persistent Systems. The rest becomes history, of iconic proportions, created by Dr. Anand Deshpande, unarguably Indian IT's most prolific and self-effacing thought leader-practitioner. In a world of unabashed corporate antagonism, replete with umpteen "founding" and first-mover claims to breakthrough ideas, concepts or methodologies, this maverick stands out for his razor-sharp insights and matter-of-fact foresight.
Over the years, the name Persistent has aptly reflected the company's stellar character but its value proposition transcends the database connotation, for the persistence of the company's vision, mission and values is extremely nimble, guided by the ability to adapt to the changing dynamics and evolving paradigms of the software industry. The company has redefined Persistence – in the non-data context of industries and markets – as an unflinching commitment guided by purposeful perseverance. No wonder, it has rebuilt and sustained its competitive edge at every turning point of the industry's evolution since its inception.
Larsen & Toubro Ltd (Q2 FY17): Guidance intact - BUY
CMP (Rs) 1,329, 12-mts Target (Rs) 1,610, Upside 21.2%
LT managed to report inline results as the impact of weak execution in infrastructure division was offset by higher contribution from hydrocarbon and electrical & automation divisions. Infrastructure segment execution was impacted by delayed monsoon and client side issues. Operating performance was impacted by cost overruns at projects impacted by client-side issues and inventory writedown in its shipbuilding division. Order inflow was strong at Rs.311bn led by strong ordering in domestic infrastructure. The company has witnessed some pickup in selective area in the domestic market and expects H2 FY17 performance to be quite strong. It has maintained its guidance of 15% yoy growth in order inflow, 12-15% yoy growth in revenue and +50bps margin expansion in core business. Recent correction provides good opportunity to accumulate the stock at valuations are attractive at 17x standalone FY18E P/E. We upgrade the stock to Buy with a target price of Rs.1,610.
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