Anand Deshpande and Sandeep Kalra: Persistence In Every Lap

GeBEING A SPORTS enthusiast, it is only natural for Sandeep Kalra, CEO of Persistent Systems, to liken the current global uncertainties to the twists and turns of a Formula 1 race. “People don’t win the race when they are going straight. You win the race over the bends. Your skill comes in navigating those bends and overtaking others at those bends. Everyone can drive fast in a straight line,” he says. His company, Persistent Systems, is living proof. The bends, or the business uncertainties, prompted the IT major to outpace its peers in growth. In FY25, when the industry saw moderate, low single-digit growth — Persistent logged an 18.8% YoY rise in dollar revenues to $1.4 billion, from $1.2 billion in FY24, all while navigating the twists of AI advancements, a new team at the White House, and the challenges stemming thereof. Profits, meanwhile, registered a 3-year CAGR of 26.6% (FY22-25) in rupee terms. “I’m confident [that] whether it’s our customers or us, the people who take bold decisions, who give their best, will emerge as winners,” Kalra says. For a sector reeling under the uncertain macro environment, cost take out and vendor consolidation projects have been holding up growth. Notably, AI infusion in deals has become mainstream. For the Pune-headquartered firm, AI is a big part of the strategy to counter headwinds in both renewals and new deals. Instilling data readiness among customers for AI-related deployments has been integral, Kalra explains. It is also an area where larger programmes and projects are anticipated. “We are dealing with Fortune 500 and even mid-market companies to get them ready to adopt AI from a data infrastructure readiness perspective.” At the heart of Persistent’s AI story are SASVA and iAURA, launched last year. While SASVA is a GenAI-powered digital engineering platform, iAURA is an enterprise data management solution that helps in drawing actionable insights, data migration, and other data management-related needs. Persistent has nearly 75 patents for SASVA, which streamlines the entire software development lifecycle. Its key differentiators include on-premises deployment tailored for regulated industries and an optimised GPU infrastructure that reduces scaling costs. iAURA, which has 30-plus agents across industries in process and document intelligence, was upgraded with agentic capabilities this year. As more enterprises get their data ready for AI layering, Persistent hinges on greater penetration of industry AI agents going ahead. “We are playing in this [segment] in a systematic manner, building IPs, doing partnerships wherever relevant,” Kalra adds. While the BFSI sector has been an outlier in demand amid uncertainties, the CEO sees an AI demand uptick in the hi-tech sector, providing adequate tailwind right from hyperscalers to startups. “We have been successful in taking our own platform or capabilities to these companies, where mid-market and private equity firms are happy working with us to adopt the technology,” he says, adding that deal wins and pipelines have been encouraging in recent quarters. Anand Deshpande, founder, chairman, and MD, attributes Persistent’s new-found aggression to its ability to anticipate changes and the willingness to disrupt oneself. “It’s not the size that makes the difference but what you do with your capabilities,” he says. However, the industry veteran, with over three and a half decades of experience, has a word of caution: amid rapidly evolving technologies, any edge a company enjoys today may not necessarily hold tomorrow. With the industry decoupling headcount from revenue, and companies realigning their workforce for futureproofing, AI-led productivity also provides an avenue to do more work with fewer people. Internally, Persistent is embedding AI across functions via an agentic framework called ‘Persistent AssIst’. It has launched more than 50 agents in various functions where it is significantly saving the turnaround time. So, what will clients be willing to pay IT vendors for in the future? A combination of efforts and results, feels Deshpande. “Getting new projects is more likely to be effort-based, but optimisation of existing projects, or redoing technical debt, or areas where there is clarity on the current spend, are more likely to convert into ‘show me results, and I’ll pay you for the results, and not for the effort’.” No wonder the top two ‘Persistent’ leaders now discuss less of revenue targets and more of the future course. “My guidance to Sandeep and other people has been to focus on things where you are the market leader. Do something unique, so that in a particular area, you are the customer’s partner of choice,” Deshpande explains. D-Street has shown faith in this leadership as is evident from Persistent’s P/E ratio touching a high of 61.24 in FY25. In Q1FY26, the company saw $389.7 million in revenues, a 3.9% rise QoQ, with an order book of over half a billion ($520.8 million in total contract value). In Q2FY26, Persistent beat market expectations to clock revenues of $406 million, up 4.2% QoQ, despite tariffs and trade barriers. While the new H-1B visa policy is widely seen as restrictive, the company sees no major impact. “We may invest in near-shore centres or onshore centres, but as we are growing in percentage terms, I don’t think it will be structurally far from where we are. The headcount may increase, but percentage-wise, it may not rise significantly,” Kalra said during the earnings call. Following the company’s latest earnings, Nomura analysts expect Persistent’s dollar revenue to grow at 14.8-17.3% during FY26-FY28F. “Overall, Persistent remains confident of a 200-300-basis-point improvement in Ebit margin (vs FY25’s level of 14.7%) in the next two years. We lift our Ebit margin forecasts by 40-50 bps for FY26-27F to 15.7-16.3%,” a Nomura note, dated October 15, read. Persistent exudes confidence as it gears up to cross the $2-billion line and improve its margins by another 100 bps by the end of FY27. Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.

Anand Deshpande and Sandeep Kalra: Persistence In Every Lap

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