Persistent Systems Ltd Management Discussions

Global Macroeconomic and Industry Landscape

The global IT services market is projected to reach USD 1.73 trillion in 2025, up 9% from USD 1.59 trillion in 2024, according to Gartner, making IT services the largest segment of worldwide IT spending. This growth is propelled by accelerated enterprise adoption of Artificial Intelligence (AI), cloud computing, and IoT, with overall worldwide IT spending expected to total USD 5.61 trillion in 2025, a 9.8% increase from the previous year. India remains a pivotal player in this landscape, with IT exports expected to reach USD 210 billion in the 2024-25 financial year, accounting for 18% of global IT outsourcing spending and driven largely by robust US demand.

While Global Capability Centers (GCC) in India continue to grow faster than traditional IT services providers, the sector faces a dual challenge from both, the internal competition and the disruptive impact of AI. AI presents enormous opportunities for innovation and efficiency but also introduces risks by changing pricing and delivery models, compressing margins, and demanding rapid upskilling of the workforce. As a result, Indian IT services companies must navigate a more complex and competitive environment, balancing the need for strategic reinvention with the realities of inflation, trade policy shifts, and talent mobility constraints to sustain growth and global relevance.

Despite these macroeconomic headwinds, the IT sector exhibited remarkable resilience and adaptability. Enterprises worldwide accelerated their digital transformation journeys, seeking to enhance agility and competitiveness through the adoption of advanced technologies. Artificial Intelligence (AI), cloud computing, and data analytics became pivotal enablers, empowering businesses to navigate complexity and uncertainty. The IT services industry, in particular, experienced a period of transformation, with AI-led delivery, cloud-native solutions, and cybersecurity emerging as key growth drivers. Engineering, Research & Development (ER&D) and the Global Capability Center (GCC) landscape also opened new avenues for innovation and value creation.

Persistents Strategic Positioning and Performance

Celebrating its 35th anniversary, Persistent Systems achieved a significant milestone by surpassing USD 1.4 billion in annual revenue, reflecting an impressive 18.8% year-over-year growth in USD terms. This performance underscores Persistents steadfast commitment to delivering value through its AI-led, platform-driven services strategy. Over the years, Persistent has established itself as a trusted partner in digital engineering and enterprise modernisation, leveraging deep technical expertise and industry experience to help clients anticipate and respond to future challenges and opportunities.

Persistents diversified portfolio encompasses end-to-end software product engineering, cloud and infrastructure modernisation, advanced data and analytics, customer experience transformation, enterprise IT security, and intelligent automation. The companys robust execution framework, which blends design thinking, hackathons, and accelerators, enables the delivery of next-generation software products and impactful user experiences. These capabilities have positioned Persistent as a partner of choice for leading global enterprises seeking to accelerate their digital transformation initiatives. Persistents AI strategy is anchored around four pillars. With AI for Technology, the Company is proceeding simultaneously on two fronts. Firstly, the Company is utilising its product development expertise to collaborate with leading technology and hyperscalers to help them engineer and scale their platforms for their enterprise clients. Secondly, the Company is building SASVA, its Generative AI-enabled platform which has 35 patents, to accelerate software and application development for technology companies and enterprises. With AI for Business, the Company is continuing to invest in its iAURA and GenAI platforms to accelerate its agentic AI roadmap for enterprises across industry verticals. Persistent is also adding an Agentic Reasoning Layer to create back-end agentic workflows, which is generating an increase in client engagements for additional data and engineering solutions.

The third pillar involves strategic acquisitions to enhance the Companys capabilities, such as Starfish and Arrka, which have added significant value to our contact center and data privacy governance offerings. Finally, the Company is leveraging its AI investments to transform business models, focusing on outcome-driven and differentiated commercial models that create value for customers and drive growth for Persistent.

Industry Focus and Growth

Persistents industry-focused approach has yielded substantial growth across key verticals. The Healthcare & Life Sciences segment led the way with a remarkable 54% year-over-year increase, driven by digital health initiatives and the growing demand for data-driven healthcare solutions. The Banking, Financial Services & Insurance (BFSI) sector achieved 17.8% growth, benefiting from the Companys focus on digital banking, risk management, and regulatory compliance solutions. Meanwhile, the Software & Hi-Tech vertical recorded steady growth, emphasising product innovation and agile methodologies to meet evolving client needs.

Innovation, Intellectual Property, and AI Journey

Innovation remains at the heart of Persistents strategy. The Company has made significant investments in developing proprietary platforms and accelerators such as SASVA, an AI-driven platform that enhances software development and testing, and GenAI Hub & iAURA, which facilitate AI-enabled workflows across industries. Persistents deep roots in data systems and decades of enterprise experience make it an ideal partner for organisations seeking to harness the transformative potential of AI while adhering to stringent security, privacy, and governance requirements. The Companys Generative AI (GenAI) capabilities are helping clients accelerate software development, enhance customer service, and optimise workplace processes, all while delivering measurable efficiencies and outcomes.

Customer Experience and Data Integration

Persistent is committed to transforming customer experience through a blend of user-centric design, advanced analytics, and GenAI. By integrating these capabilities, the Company enables clients to enhance digital engagement, accelerate go-to-market strategies, and improve user adoption. Persistents enterprise integration services further empower organisations to overcome fragmented application landscapes, ensuring seamless, real-time data exchange and greater organisational agility.

Strategic Partnerships, Recognitions, and Talent Development

Persistents collaborative approach has resulted in significant partnerships and industry accolades. The Company was recognized as the 2025 Infrastructure Modernization Partner of the Year for Asia Pacific by Google Cloud, reflecting its success in large-scale cloud migrations. Brand Finance named Persistent the fastest-growing IT services brand in the 2024 India 100 report, with a 327% increase in brand value since 2020. Additionally, the company received the ISG Star of Excellence™ for superior customer experience and adaptability.

With a workforce exceeding 24,500+ employees, Persistent places a strong emphasis on continuous learning and talent development. Upskilling initiatives in AI, cloud technologies, and domain-specific expertise ensure that employees remain at the forefront of technological advancements. The appointment of Vinit Teredesai as Additional Director (Executive Member) and Chief Financial Officer to the Board has further strengthened the Companys financial stewardship.

Mergers, Acquisitions, and ESG Commitment

Persistent has strategically expanded its capabilities through targeted acquisitions, including Starfish Associates (contact center modernisation), Arrka (data privacy and AI governance), and Soho Dragon (BFSI sector expertise). These acquisitions have enhanced Persistents ability to deliver comprehensive solutions across industries.

The Company is deeply committed to Environmental, Social, and Governance (ESG) principles, integrating sustainability goals, community development initiatives, and high standards of corporate governance into its core strategy. Persistents measurable targets for reducing environmental impact and its investments in employee well-being reflect its dedication to responsible growth.

Persistent is a constituent of the Dow Jones Sustainability World Index, scoring an impressive 85, up from 61 this year, placing us among global leaders in sustainable business practices. This recognition affirms our dedication to upholding the highest ESG standards, creating long-term value, and positively impacting our stakeholders. Being part of the DJSI reinforces our enhanced reputation, strengthens investor confidence, improves access to capital, lowers costs, and sharpens our risk management practices. Moreover, Persistent has been included in the top 10% of the S&P Global 2025 Sustainability Yearbook, reaffirming our commitment to responsible business practices and long-term ESG impact. Out of over 7,690 companies assessed, only 780 across 62 industries were included in the 2025 Sustainability Yearbook, based on the S&P Global Corporate Sustainability Assessment score.

In terms of our ESG performance, we are thrilled to report that our S&P Dow Jones Sustainability Index (DJSI) ESG rating has risen to 85, up from 61, while our SES-ESG rating has improved to 77 from 72. Additionally, we have made commendable progress in our MSCI ESG rating, advancing from BB to BBB. We are also proud to be recognized among Indias Top 50 Most Sustainable Companies for 2024 by BW Businessworld, a leading business publication in the country.

Opportunities, Challenges, and Risk Management

AI presents a key opportunity for Persistent as it enables the Company to deliver innovative solutions and transform business models. By leveraging AI technologies, Persistent can help its clients across various industries, such as banking, healthcare, and technology, to improve efficiency, reduce costs, and drive growth. The Companys investments in GenAI-enabled platforms like SASVA and its expertise in data plumbing and engineering position it well to capitalize on the growing demand for AI-powered solutions.

However, AI also poses key challenges for Persistent, such as the need to stay ahead of rapidly evolving technologies, ensure data privacy and governance, and address potential disruptions to traditional business models. The Company is constantly innovating and will continue to deliver high-quality AI solutions that meet client needs and expectations. The accelerating pace of digitisation presents both opportunities and challenges. Persistent is well-positioned to capitalise on trends such as AI-driven automation, real-time analytics, and cloud-native transformation. However, the Company remains vigilant in managing risks related to cybersecurity, regulatory compliance, talent acquisition, and the measurement of digital transformation ROI. Persistents robust cybersecurity frameworks and proactive compliance measures ensure that client data remains secure and that the Company meets evolving regulatory standards.

Outlook

Looking ahead, Persistent aims to achieve USD 2 billion in revenue over the next few years, driven by an AI-first strategy, the expansion of proprietary platform-led solutions, and continued global expansion. The Companys focus on innovation, operational efficiency, and client-centric solutions will be instrumental in sustaining growth and creating long-term stakeholder value. Persistent remains dedicated to leveraging its expertise, partnerships, and culture of excellence to navigate the evolving technology landscape and deliver sustainable, differentiated value to clients worldwide.

Financial performance summary

		Financial Year	% to	Financial Year	% to
Particulars	Unit	2024-25	revenue	2023-24	revenue	Growth
Revenue	_ Million	119,387.17		98,215.87		21.56%
Revenue	$ Million	1,409.09		1,186.05		18.8%
Earnings before interest,	_ Million	20,581.93	17.24%	17243.02,	17.56%	19.36%
depreciation, amortization and taxes
Profit Before Tax	_ Million	18,223.08	15.26%	14,476.06	14.74%	25.88%
Profit After Tax	_ Million	14,001.61	11.73%	10,934.91	11.13%	28.05%
Earnings Per Share (EPS)
Basic	_	91.22		72.44		25.92%
Diluted	_	90.24		71.07		26.97%

Share Capital

The authorised share capital of the Company as at March 31, 2025, was _ 2,000.00 Million divided into 400 Million equity shares of _ 5 each. The paid-up share capital as at March 31, 2025, was _ 779.25 Million divided into 155.85 Million equity shares of _ 5 each. (Previous year _ 770.25 Million divided into 154.05 Million equity shares of _ 5 each).

Other Equity

The Other Equity as at March 31, 2025, stood at _ 62,411.40 Million as against _ 48,806.82 Million as at March 31, 2024, showing a growth of 27.87%. The details of Other Equity are as below:

		(In _ Million)
Particulars	As at March 31, 2025	As at March 31, 2024
General Reserve	27,730.15	25,842.99
Share Options Outstanding Reserve	3,432.38	2,227.71
Gain on bargain purchases	65.19	63.61
Capital redemption reserve	35.75	35.75
Retained Earnings	28,833.47	19,346.09
Securities premium reserve	3,438.70	1,601.80
Treasury shares	(2,994.10)	(2,085.84)
PSL ESOP trust reserve	180.77	140.64
Effective portion of cash flow hedges	(2.32)	23.85
Exchange differences on translating the financial statements of foreign operations	1,691.41	1,610.22
Total	62,411.40	48,806.82

General Reserve

During the year, there has been a transfer of _ 1,887.16 Million from Share Options Outstanding Reserve on exercise/expiry of stock options by the employees. The balance in General Reserve stood at _ 27,730.15 Million as at March 31, 2025, as against _ 25,842.99 Million as at March 31, 2024.

Please refer to ‘Other Equity under Statement of Changes in Equity in the consolidated financials for details.

Share Options Outstanding Reserve

In accordance with Ind AS 102 – Share Based Payments, the cost of equity-settled transactions is determined by the fair value of the options at the date of the grant and recognized as employee compensation cost over the vesting period following graded vesting method.

The amount of stock options outstanding as at March 31, 2025, was _ 3,432.38 Million for 6.71 Million options outstanding as on that date (the corresponding amount in the stock options outstanding account as on March 31, 2024, was _ 2,227.71 Million for 8.75 Million options outstanding as on that date). The increase in the liability represents the fair value of options granted (including Deep-discounted options) during the year to the employees. Please refer to ‘Other Equity under Statement of Changes in Equity in the consolidated financials for details.

Gain on Bargain Purchases

As per Ind AS 103- Business Combinations, if the net fair value of the identifiable assets, liabilities and contingent liabilities acquired exceeds the cost of business acquisition, a gain is recognised as Gain on bargain purchases under other comprehensive income. The Company has carried out the fair valuation of all identifiable assets, liabilities and contingent liabilities acquired under the business acquisitions after the date of transition to Ind AS (i.e. April 1, 2015). Based on this, the Gain on bargain purchases stood at _ 65.19 Million as at March 31, 2025, as compared to _ 63.61 Million as at March 31, 2024. Please refer to ‘Other Equity under Statement of Changes in Equity in the consolidated financials for details.

Capital Redemption Reserve

Capital redemption reserve represents the nominal value of the shares bought back and is created and to be utilised in accordance with Section 69 of the Companies Act, 2013. The Capital redemption reserve was unchanged and stood at _ 35.75 Million as at March 31, 2025, and March 31, 2024. Please refer to ‘Other Equity under Statement of Changes in Equity in the consolidated financials for details.

Retained Earnings

The balance retained in the Statement of Profit and Loss as at March 31, 2025 is _ 28,833.47 Million, after appropriation towards dividend of _ 4,657.50 Million.

The details of changes in Retained Earnings are as follows:

Particulars	For the year ended March 31, 2025	For the year ended March 31, 2024
Opening balance	19,346.09	16,607.36
Net profit for the year	14,001.61	10,934.91
Items recognized in / from other comprehensive income for the year	143.27	(77.00)
Dividend	(4,657.50)	(4,153.95)
Transfer to general reserve	-	(3,965.23)
Closing balance	28,833.47	19,346.09

Please refer to ‘Other Equity under Statement of Changes in Equity in the consolidated financials for details.

Treasury shares

Treasury shares represent the number of shares held by ESOP Trust. The treasury shares have a balance of _ 2,994.10 Million as at March 31, 2025, as compared to _ 2,085.84. Million as at March 31, 2024. Please refer to ‘Other Equity under Statement of Changes in Equity in the consolidated financials for details.

PSL ESOP Trust reserve

PSL ESOP Trust reserve represents the dividend received by ESOP trust from the company. The PSL ESOP Trust reserve has a balance of _ 180.77 Million as at March 31, 2025, as compared to _ 140.64 Million as at March 31, 2024. Please refer to ‘Other Equity under Statement of Changes in Equity in the consolidated financials for details.

Effective Portion of Cash Flow Hedges

The Company derives a substantial part of its revenues in foreign currency, while a major part of its expenses is incurred in Indian Rupees. This exposes the Company to the risk of loss due to fluctuations in foreign currency rates.

The following chart shows the movement of monthly spot and forward rates of the Rupee against the USD in Financial year 2024-25, indicating the volatility that the currency faced throughout the year: _/$ Currency Movement

The Company minimises the foreign currency fluctuation risk as per the Companys Foreign Exchange Risk Management Policy. The Company holds plain vanilla forward contracts against a portion of expected future receivables in USD to manage the risk of changes in exchange rates.

As per the accounting principles laid down in Ind AS 109 – ‘Financial Instruments relating to cash flow hedges, derivative financial instruments which qualify for cash flow hedge accounting are fair valued at balance sheet date and the effective portion of the resultant loss / (gain) is debited / (credited) to the hedge reserve under other comprehensive income and the ineffective portion is recognised in the statement of profit and loss. Derivative financial instruments are carried as forward contract receivable when the fair value is positive and as forward contract payable when the fair value is negative.

Changes in the fair value of derivative instruments that do not qualify for hedge accounting are recognised in the statement of profit and loss as they arise. Hedge accounting is discontinued when the hedging instrument expires or is sold, or terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss on the hedging instrument recognised under other comprehensive income is transferred to the statement of profit and loss when the forecasted transaction occurs or affects profit or loss or when a hedged transaction is no longer expected to occur.

Accordingly, the Hedge Reserve (net of tax effects) as at March 31, 2025 stood at a debit balance of _ (2.32) Million as against a credit balance of _ 23.85 Million as at March 31, 2024. Please refer to ‘Other Equity under Statement of Changes in Equity in the consolidated financials for details.

Exchange Differences on Translating the Financial Statements of Foreign Operations

While consolidating the financial statements of subsidiaries (including step down subsidiaries) with the financial statements of the Parent Company, the assets and liabilities are stated in Indian Rupees by applying the closing exchange rates, equity is stated in Indian Rupees by applying the historical exchange rates and income and expenditure are stated in Indian Rupees by applying the average exchange rates. This creates an exchange difference on consolidation, which is accumulated under the foreign currency translation reserve.

The balance in the foreign currency translation reserve was _ 1,691.41 Million as at March 31, 2025 as against _ 1,610.22 Million as at March 31, 2024. Please refer to ‘Other Equity under Statement of Changes in Equity in the consolidated financials for details.

Non-current Assets (other than non-current financial assets)

The Non-current assets (other than non-current financial assets) as at March 31, 2025, stood at _ 26,184.43 Million as against _ 22,549.98 Million as at March 31, 2024. The details are as below:

		(In _ Million)
Particulars	As at March 31, 2025	As at March 31, 2024
Property, Plant and Equipment	4,350.88	4,420.03
Capital work-in-progress	41.84	218.73
Right of use assets	3,798.67	2,307.18
Goodwill	12,337.94	10,912.56
Other Intangible assets	4,923.33	4,574.95
Intangible assets under development	731.77	116.53
Total	26,184.43	22,549.98

Property, Plant and Equipment

The gross block of Property, Plant and Equipment amounted to _ 12,866.55 Million as at March 31, 2025 as against _ 12,354.06 Million as at March 31, 2024. The increase is primarily because of the acquisition of computers during the year.

Capital Work-in-progress

Capital work-in-progress (Capital WIP) stood at _ 41.84 Million as at March 3, 2025 as against _ 218.73 Million as at March 31, 2024. The decrease is primarily because of capitalization of some of the assets which became operational.

Right of Use Assets

The gross block of Right of Use Assets stood at _ 5,690.50 Million as at March 31, 2025 as against _ 3,772.07 Million as at March 31, 2024. Net additions of _ 1,918.43 Million have been made towards renewals/ additions of leased office premises.

Goodwill

Goodwill represents the cost of business acquisition in excess of the Companys interest in the net fair value of identifiable assets, liabilities and contingent liabilities of the acquired Company. The Goodwill as at March 31, 2025, was _ 12,337.94 Million as against _ 10,912.56 Million as at March 31, 2024. The increase is due to amounts recognised on business acquisitions made during the year.

Other Intangible Assets

The gross block of intangible fixed assets amounted to _ 17,551.39 Million as at March 31, 2025 as against _ 15,688.86 Million as at March 31, 2024. The additions mainly pertain to software and acquired contractual rights, including those acquired through business combinations.

Please refer note no. 44 of the consolidated financial statements for details.

Non-current Financial Assets

The non-current financial assets as at March 31, 2025, were _ 7,853.25 Million as against _ 6,960.38 Million as at March 31, 2024. The details of non-current financial assets are as follows:

		(In _ Million)
Particulars	As at March 31, 2025	As at March 31, 2024
Trade receivable	664.40	730.18
Investments	6,415.04	5,539.14
Other non-current financial assets	773.81	691.06
Total	7,853.25	6,960.38

Non-current Financial Assets: Trade receivable

In some IP deals, we have deferred credit arrangements with certain large enterprise customers. These customer outstanding are realisable after 12 months and are shown as Non-current trade receivables. The trade receivables stood at _ 664.40 Million as at March 31, 2025 as against _ 730.18 Million in the previous year.

Non-current Financial Assets: Investments

The total non-current investments as on March 31, 2025, stood at _ 6,415.04 Million as against _ 5,539.14 Million in the previous year. The net increase in non-current investments is mainly due to an increase in investment in mutual funds net of write-off of investment in Trunomi, Inc. Please refer to Note 6 of the consolidated financials for details.

Other Non-current Financial Assets

Other non-current financial assets consist of the non-current deposits with banks and the financial institutions including interest accrued on these deposits.

The Company has fully provided for the deposits of _ 130.00 Million with IL&FS Ltd and _ 300.00 Million with IL&FS Financial Services Ltd by FY20. During the year, the Company has received _ 21.12 Million from the IL&FS Group, and the Management is hopeful of recovering the balance amount with a time lag. The Company continues to monitor developments in the matter and is committed to taking steps including legal action that may be necessary to ensure full recovery of the said deposits.

During the year, the Company has received proceeds from the maturity of the deposits of HDFC Limited of _ 100.00 Million. Please refer to Note 8 of the consolidated financials for details.

Deferred Tax Assets and Deferred Tax Liabilities

On March 31, 2025, the net deferred tax assets amounted to _ 1,873.75 Million, compared to _ 1,340.88 Million on March 31, 2024.

Please refer Note 9 of the consolidated financials for component-wise details of deferred tax balances.

Other Non-current Assets (other than financial assets)

Other non-current assets, besides financial assets, include Income tax assets (net) and other non-current assets. The amount of Income tax assets (net) was _ 787.55 Million as at March 31, 2025, as against _ 387.05 Million as at March 31, 2024. Other non-current assets was _ 257.02 Million as at March 31, 2025, as against _ 1,247.28 Million as at March 31, 2024. The details for the Other non-current assets are given below: (In _ Million)

Particulars	As at March 31, 2025	As at March 31, 2024
Capital advances	33.53	826.67
Prepayments	223.49	420.61
Total	257.02	1,247.28

Current Financial Assets

		(In _ Million)
Particulars	As at March 31, 2025	As at March 31, 2024
Investments	3,388.17	2,726.54
Trade receivables (net)	18,477.95	16,761.13
Cash and cash equivalents	6,744.06	6,625.15
Bank balances other than cash and cash equivalents	3,510.65	3,603.71
Other current financial assets	9,375.16	6,621.83
Total	41,495.99	36,338.36

Current Investments

As per the Investment Policy approved by the Board of Directors, the Company invests its surplus funds in liquid and debt schemes, and fixed maturity plans of some reputed mutual funds with a focus on capital preservation, liquidity and optimization of returns.

Investment in mutual funds classified under current investments stood at _ 3,388.17 Million as at March 31, 2025 as compared to at _ 2,726.54 Million as at March 31, 2024.

Trade Receivables

Trade receivables (net of provision for doubtful debts) amounted to _ 18,477.95 Million as at March 31, 2025 as against _ 16,761.13 Million as at March 31, 2024.

The Company uses a provisioning policy approved by the Board of Directors to compute the expected credit loss allowance for trade receivables. The policy takes into account available external and internal credit risk factors and the historical payment track record of customers. Further, the policy incorporates the provisioning of all customer balances which are overdue for a period of more than 180 days.

Provision for doubtful debts stood at _ 916.03 Million as at March 31, 2025 as against _ 398.64 Million as at March 31, 2024. Please refer to Note 12 of the consolidated financials for details.

DSO was 58 days as of March 31, 2025, compared to 63 days as of March 31, 2024.

Cash and Cash Equivalents

Cash and cash equivalents include bank balances and cash on hand. Cash and cash equivalents increased to _ 6,744.06 Million as at March 31, 2025 from _ 6,625.15 Million as at March 31, 2024.

Bank balances other than cash and cash equivalents

Deposits with banks having a maturity of more than twelve months from the balance sheet date, including interest thereon, and the balances on unpaid dividend accounts are considered under other bank balances. These deposits amounted to _ 3,490.42 Million as at March 31, 2025 as compared to _ 3,600.79 Million as at March 31, 2024. The balances on unpaid dividend accounts was _ 20.23 Million as at March 31, 2025 as against _ 2.92 Million as at March 31, 2024. Please refer Note 14 of the consolidated financials for details.

Other Current Financial Assets

Other current financial assets were _ 9,375.16 Million as at March 31, 2025 as compared to _ 6,621.83 Million as at March 31, 2024. Following are the components of other current financial assets:

Particulars	As at March 31, 2025	As at March 31, 2024
Security deposits	116.44	57.95
Forward contracts receivable	-	42.54
Unbilled revenue	9,258.72	6,521.34
Total	9,375.16	6,621.83

The amount of forward contracts receivable represented favourable position (i.e. Mark To Market gain) as at the Balance Sheet date in respect of the forward contracts entered into by the Company. Unbilled revenue represents revenue recognized in relation to work done until the Balance Sheet date for which billing has not taken place. Please refer Note 16 of the consolidated financials for details.

Other Current Assets

Other current assets were _ 8,763.54 Million as at March 31, 2025, as compared to _ 5,230.49 Million as at March 31, 2024. Other current assets include advances recoverable in cash or kind within period of twelve months from the Balance Sheet date and VAT receivable, Service Tax and GST receivable.

Current ratio was 2.36 as at March 31, 2025, as against 1.89 as at March 31, 2024.

Non-current Liabilities
		(In _ Million)
Particulars	As at March 31, 2025	As at March 31, 2024
Financial liabilities
Borrowings (non-current portion)	-	99.15
Lease liabilities	2,156.67	1,608.09
Provisions	66.95	546.96
Other financial liabilities	425.90	-
Other non-current liabilities	47.63	44.44
Total	2,697.15	2,298.64
Non-current Financial Liabilities- Borrowings

The overall break-up of total borrowings summarized below:

		(In _ Million)
Particulars	As at March 31, 2025	As at March 31, 2024
Term Loans
India Rupee loan	-	1.85
Interest accrued but not due	-	0.02
Foreign Currency loan from others
Loan from HSBC	-	2,059.52
Interest accrued on loan from HSBC	-	11.80
Total	-	2,073.19

Indian rupee loan from Government department was Nil (Previous year: _ 1.85 Million) having interest @ 3% p.a. which was repayable in ten equal annual installments over a period of ten years commencing from October 2015 has been repaid. Please refer Note 19 of the consolidated financials for details.

There are no debts as at March 31, 2025 while the debt-equity ratio was 0.04:1 as at March 31, 2024.

Non-current Liabilities- Lease liabilities

The balance of _ 2,156.67 Million represents the non-current portion of Lease Liability as at March 31, 2025, as against previous year balance of _ 1,608.09 Million.

Non-current Liabilities- Provisions

The long-term provisions are those provisions which are not expected to be settled within twelve months from the date of the Balance Sheet. Long term provisions include the liability towards long service award. The total long-term provisions have decreased to _ 66.95 Million as at March 31, 2025 as compared to _ 546.96 Million as at March 31, 2024 mainly due to discontinuation of the policy of Long-Term Service Awards to employees.

Non-current Liabilities- Other financial liabilities

The balance of _ 47.63 Million represents the non-current portion of Unearned revenue as at March 31, 2025, as against previous year balance of _ 44.44 Million.

Current Liabilities

(In _ Million)

		(In _ Million)
Particulars	As at March 31, 2025	As at March 31, 2024
Financial liabilities
- Trade payables	8,886.17	8,138.62
- Lease liabilities	952.30	830.01
- Borrowings	-	1,974.04
- Other financial liabilities	2,438.40	3,718.27
Other current liabilities	4,516.47	3,639.82
Provisions	4,028.54	3,330.66
Income tax liabilities (net)	505.85	547.29
Total	21,327.73	22,178.71

Trade Payables

Trade payables increased to _ 8,886.17 Million as at March 31, 2025, from _ 8,138.62 Million as at March 31, 2024, essentially on account of the growth in operations of the Company.

Lease Liability

The balance of _ 952.30 Million represents the current portion of Lease Liability as at March 31, 2025 as against previous year balance of _ 830.01 Million.

Other Current Financial Liabilities

Other current financial liabilities include capital creditors, accrued employee liabilities, unpaid dividend and other contractual liabilities. Other current financial liabilities have increased to _ 2,438.40 Million as at March 31, 2025, from _ 3,718.27 Million as at March 31, 2024, due to increase in accrued employee liabilities. The details of major components of other current financial liabilities are shown below: (In _ Million)

		(In _ Million)
Particulars	As at March 31, 2025	As at March 31, 2024
Capital creditors	59.66	79.97
Accrued employee liabilities	999.37	1,092.42
Unpaid dividend	20.23	2.92
Other liabilities	38.99	78.41
Foreign exchange forward contracts	36.82	-
Payable to Selling Shareholders	1,283.33	2,464.55
Total	2,438.40	3,718.27

Other Current liabilities

Other current liabilities include unearned revenue, advances from customers and statutory and other liabilities. Unearned revenue represents the billing in respect of contracts for which the revenue is not recognized. The other current liabilities have increased to _ 4,516.47 Million as at March 31, 2025, from _ 3,639.82 Million as at March 31, 2024. Please refer to Note 24 of the consolidated financials for details.

Current Liabilities: Provisions

The short-term provisions denote the employee liabilities and other provisions expected to be settled within a period of twelve months from the date of the Balance Sheet. The short-term provisions were _4,028.54 Million as at March 31, 2025, as against _ 3,330.66 Million as at March 31, 2024. The details of the components of short-term provisions are given below:

		(In _ Million)
Particulars	As at March 31, 2025	As at March 31, 2024
Provision for employee Benefits
Gratuity	24.78	0.13
Leave encashment	1,716.12	1,651.87
Long service awards	-	34.02
Other Employee benefits	2,287.64	1,644.64
Total	4,028.54	3,330.66

Income Tax Liabilities (Net)

Current tax liabilities were _ 505.85 Million as at March 31, 2025, as against _ 547.29 Million as at March 31, 2024. Refer to Note 33 of Consolidated Financial Statements for details.

Revenue from Operations (Net)

The Company provides product engineering services, platform-based solutions and IP-based software products for global customers. The Company derives a significant portion of revenues from exporting software services and products. The revenue for the year in USD terms was up by 18.8% at USD 1,409.1 Million against USD 1,186.0 Million in the previous year. In Rupee terms, the revenue was _ 119,387.17 Million against _ 98,215.87 Million, representing a growth of 17.24% over the previous year. The average rate of the Rupee depreciated by 2.3% during the year against the US Dollar.

The operating segments of the Group are:

• Banking, Financial Services and Insurance (BFSI)

• Healthcare & Life Sciences

• Technology Companies and Emerging Verticals

The following is the graphical presentation of the contribution of the segments in the total revenue:

			(In _ Million)
Particulars	For the Year ended March 31, 2025	For the Year ended March 31, 2024	Growth
Segmental revenue
- BFSI	37,709.68	31,385.58	15.25%
- Healthcare & Life Sciences	32,551.45	20,880.32	29.20%
- Technology Companies and Emerging Verticals	49,126.04	45,949.97	14.55%
Total
Segmental Operating income
- BFSI	13,486.46	11,523.86	15.19%
- Healthcare & Life Sciences	12,768.39	8,671.22	8.21%
- Technology Companies and Emerging Verticals	14,320.53	11,804.66	(3.89%)
Total
Segmental Operating margin %
- BFSI	35.76%	36.72%
- Healthcare & Life Sciences	39.23%	41.53%
- Technology Companies and Emerging Verticals	29.15%	25.69%

In terms of the geographical mix of revenue, North America continued to dominate by contributing 80.68% of the total revenue. Contribution from India was 9.38% while the Rest of the World contributed 9.94% of the total revenue. The details in respect of the percentage of revenues generated from top customer, top 5 customers and top 10 customers are as under:

Revenue Concentration	2024-25	2023-24
Top 1	10.4%	9.4%
Top 5	31.3%	27.7%
Top 10	40.9%	39.0%

Other Income

As explained in Note 27 of the consolidated financials, Other Income consists of income from investment of surplus funds in the form of dividends from mutual funds, profit on sale of investments, interest on deposits and bonds, foreign exchange gain and miscellaneous income. Other income has increased to _ 1,381.54 Million for the year ended March 31, 2025, from _ 1,280.20 Million for the year ended March 31, 2024. One of the major reasons for an increase in other income was due to gain on sale of financial assets of _ 492.76 Million as against the gain of _ 289.11 Million in the previous year. The details of other income are given below:

Particulars	For the Year ended March 31, 2025	For the Year ended March 31, 2024	Change
Investment income (including interest, dividend, fair value gain/loss and profit on sale of investments)	1,077.33	851.56	26.51%
Foreign exchange gain	89.18	84.97	4.95%
Miscellaneous Income (including Advances and excess provisions written back and profit on sale of fixed assets)	215.03	343.67	(0.01%)
Total	1,381.54	1,280.20	7.92%

Personnel Expenses

Personnel Expenses for the year amounted to _ 86,228.82 Million against _ 71,102.40 Million for the previous year, showing an increase of 21.27%. As a percentage of revenue, these expenses were 74.70% during the year as compared to 75.49% in the previous year.

Please refer to Note 28 of the consolidated financials for details.

Other Expenses

Operating and other expenses for the year amounted to _ 12,576.42 Million against _ 10,356.61 Million in the previous year. As a percentage of revenue, the expenses decreased to 10.53% from 10.54%.

The main reasons for variations in Operating and other expenses are as below:

• Travelling and conveyance costs went up by _ 177.05 Million primarily due to an increase in airfares

• Purchase of software licenses costs went up by _ 1,871.17 Million mainly due to increased headcount and an increase in the cost of sale for a few partner IPs

• Legal and professional fees have increased by _ 583.85 Million on account of due diligence and other legal fees incurred for acquisitions.

Please refer to Note 29 of the consolidated financials for more details.

Profit Before Interest, Tax, Depreciation and Amortisation

During the year, the Company reported Profit before interest, tax, depreciation and amortisation of _ 20,581.93 Million, representing an increase of 22.83% over Profit before interest, tax, depreciation and amortisation of _ 16,756.86 Million during the previous year. The margin of Profit before interest, tax, depreciation and amortisation increased to 17.24% during the year from 17.06% in the previous year.

Depreciation and Amortisation

The depreciation and amortisation for the year amounted to _ 3,069.10 Million as against _ 3,093.73 Million in the previous year. Increase is mainly on account of amortisation of intangibles acquired under business combinations and new additions during the year in Property, Plant and Equipment.

Depreciation and amortisation as a percentage of revenue was 2.57% for the year against 3.15% for the previous year. The details on depreciation and amortisation is as given below:

		In _ Million)
Particulars	For the Year ended March 31, 2025	For the Year ended March 31, 2024
On Property, Plant and Equipment	920.65	1,187.51
On Other Intangible assets	921.15	651.50
On Right of Use assets	1,227.30	1,254.72
Total	3,069.10	3,093.73
Tax Expense

Tax Expense

Tax expense consists of current tax and deferred tax.

The Companys two major tax jurisdictions are India and the United States, though the Company also files tax returns in other overseas jurisdictions.

The tax expense for the year amounted to _ 4,721.97 Million (including tax charge in respect of earlier years of _ 41.92 Million) against _ 3,752.84 Million (including tax charge in respect of earlier years of _ 73.19 Million) in the previous year. The deferred tax credit for the year was _ 500.50 Million against the deferred tax credit of _ 211.69 Million in the previous year.

The total tax expense for the year amounted to _ 4,221.47 Million against _ 3,541.15 Million for the previous year. The Effective Tax Rate (ETR) for the year amounted to 23.17% as compared to 25.17% in the previous year.

Please refer to Note 33 for reconciliation of estimated income tax expense at Indian statutory income tax rate to the income tax expense reported in the statement of profit and loss.

Net Profit after Tax

The Net Profit for the year amounted to _ 14,001.61 Million against _ 10,934.91 Million for the previous year, an increase of 28.05%. The Net Profit margin for the year was 11.73% as compared to 11.13% in the previous year.

Dividend

To celebrate the 35th year of the Company, the Board of Directors recommended a Final Dividend of _15 per share. This brings the total dividend for the year to _35 including an interim dividend of _20 per equity shared declared in January 2025. The Final Dividend of _15 per share recommended by the Board is subject to approval at the ensuing Annual General Meeting. For the previous year, the total dividend was _ 26 per share.

The total appropriation towards interim dividend for the year was _ 3,117 Million as against _ 2,461.60 Million for the previous year.

On approval of final dividend of _ 15 per share which was recommended by board in its meeting held in April 2025, the amount of _ 2,337.75 Million will be appropriated from reserves. Subject to approval in the AGM, dividend will be paid on the basis of outstanding shares as on the date of distribution.

Summary of dividends declared

	Financial Year 2024-25		Financial Year 2023-24
Type of Dividend	Interim	Final	Interim	Final
Month of Declaration/recommendation	Jan-25	Apr-25	Jan-24	Apr-24
Amount of Dividend Per Equity Share of _ 5 per share	20	15	16	10
% of Dividend	400%	300%	320%	200%
Total Dividend* (In _ Million)	3,117.00	2,337.75	2,461.60	1,540.50
Total Dividend Outflow for the Year (In _ Million)		5,454.75		4,002.10

The dividend payout ratio (including proposed final dividend) for the year was 39.0% as compared to 36.6% for the previous year. *Subject to approval in the AGM, the dividend will be paid on the basis of outstanding shares as on the date of distribution.

Earnings Per Share (EPS)

Basic and Diluted earnings per share went up to _ 91.22 per share and _ 90.24 per share respectively, compared to _ 72.44 per share and _ 71.07 per share respectively in the previous year, recording an increase of 25.92% and 26.97% respectively. The impact of share split is considered for calculation of EPS.

Ratio Analysis and its Elements

Sr. No Ratio	March 31, 2025	March 31, 2024	% change	Reason for variance (If more than 25%)
1. Current ratio	2.36	1.87	26.20%	Refer Note 1
2. Debt-Equity ratio	NA	4.18%	100.00%	Refer Note 2
3. Debt Service Coverage ratio	NA	8.49	100.00%	Refer Note 2
4. Return on Equity ratio	25.18%	24.94%	0.96%	-
5. Trade Receivables turnover ratio	6.24	5.62	11.07%	-
6. Trade payables turnover ratio	3.74	2.73	27.30%	Refer Note 1
7. Net capital turnover ratio	4.13	5.07	-18.53%	-
8. Net profit ratio	11.73%	11.13%	5.34%	-
9. Return on Capital employed	27.65%	26.39%	4.77%	-
10. Return on investment	5.74%	6.86%	-16.33%	-

** Earnings available for debt service = Profit Before Tax + Finance cost + Depreciation & Amortization - Other income - Lease payments Note 1: Primarily on account of increase in current assets due to increase in business operations during the year. Note 2: The Group has repaid the outstanding borrowings during the year.

Report on Risk Management

Persistents Approach to Risk Management

Persistent has a well-defined Risk Management framework that includes a risk management policy, risk management processes, governance, and awareness programmes. Our Enterprise Risk Management (ERM) function aims to strengthen and embed proactive risk management culture across the organisation. The ERM function works closely with the various organisational units and their leadership to facilitate. The Risk Management Committee of the Board of Directors was constituted on April 24, 2017, even before the requirement of forming this Committee was applicable to the Company.

ERM Objectives

• Promote an effective risk management system that supports the Companys growth strategy, business objectives and ensure resilience to the business dynamics

• Improve institutional decision-making by giving senior management and Board of Directors timely and accurate information that helps them better comprehend the risks and possibilities at the enterprise level, and then propose mitigation plans to achieve the desired objectives

• Enhance the companys capacity to achieve its legal, regulatory, and policy compliance obligations

• Establish a process to identify and assess risks that may impact the business continuity of the Company, and define response and recovery plans for such risks

• Proactively identify potential opportunities and risks to prepare for future breakthroughs and obstacles

• Strengthen the organisations capacity to comprehend and control risk exposures and establish a culture of responsible risk-taking

• Integrate opportunity and risk assessment analysis into the companys periodic planning procedures (for example, strategic planning, annual budget cycle, etc.)

• Promote a Risk Intelligent Culture wherein conscious efforts are made at an enterprise level for aligning the organizations approach towards risk and consistently making appropriate risk-based decisions (for example. Risk Familiarization Programme for Directors and Key Managerial Personnel, and Risk Trainings across key functions)

ERM Framework

The Enterprise Risk Management (ERM) framework adopted by Persistent is mapped as per the ISO Standard 31000:2018 Risk Management — Guidelines, COSO: ERM — Integrating Strategy and Performance (2017), and the requirements of various applicable regulations in India. Our ERM framework is a holistic approach to managing the full range of risks the Company faces, especially risks that are critical to its strategic success. The framework provides guidance for identifying, assessing, measuring, monitoring, and responding to risks across the enterprise in a way that is aligned with its strategic objectives and risk appetite. ERM function reports the risks to the executive leadership and Risk Management Committee (RMC) of the Board each quarter for their regular review.

The responsibility for risk management is shared across the organisation for an effective and consistent process. There are dedicated forums involving leadership to address all the risks that are identified and tracked at an enterprise level and the Risk Management Committee of the Board is ultimately responsible for overseeing the Risk Management function of the Company.

Below is the risk management process followed at Persistent:

ERM Process Flow

• Identifying plausible uncertainties or risks that may impact the successful achievement of functional, organisational, and business objectives or threaten the business continuity of the Company. The risks are categorised into financial, operational, reputational, regulatory, extended enterprise, strategic, sustainability, talent, and technology for further assessment

Report on Risk Management

• Analysing and assessing the potential impact, likelihood and velocity of existing and newly identified risks and determining the readiness to manage them.

• Evaluating the results of the risk analysis with the established risk criteria and prioritising them based on criticality to help decide on the appropriate risk management strategy

• Formulating risk response strategies to evade / prevent / eliminate the root causes of the risks and the occurrence of risk event, especially in case of key risks

• Integrating mitigation plans devised by the risk owners in the day-to-day activities and monitoring them closely

• Monitoring and reviewing risks on a periodic basis for continuous risk assessment

• Re-evaluating the risk environment and the risk events and updating the mitigation plans if necessary

• Reporting relevant risk information to the Risk Management Committee of the Board in a timely manner to provide the necessary basis for risk-informed decision-making

Risk Categorisation

Risk categorisation at Persistent follows the ‘FORRESSSTT model which has been derived from the ‘PESTEL* model. Details of the FORRESSSTT model are as follows:

Risk Domains	Definition
Financial	Risk of potential financial loss resulting from breach of key risk indicators, ineffective or inefficient processes and controls.
Operational	Risk of potential breakdowns / deficiencies in process effectiveness or efficiency resulting from controls and / or process design weakness which may cause material exposure.
Reputational	Risk of a potential tarnished reputation, loss of marketplace or investor confidence caused by a breach in risk management requirements, Operational breakdown, legal / regulatory breach, unsuccessful product launch or other reputational-impacting event.
Regulatory	Potential fines, litigation costs or enforcement actions from regulators resulting from changes in the legal and regulatory environment, perceived or actual conflicts of interest, and potential actions or breaches of compliance and / or risk management requirements.
Extended Enterprise	Risk of potential disruption caused by a failure to identify, measure, and mitigate risks at key third-party organisations.
Sectoral	Industry risks pertaining to the sector of business.
Strategic	Potential risk(s) that could disrupt the assumptions at the core of an organisations business strategy, including risks to strategic positioning, strategic execution and strategic choices and consequences — impeding the organisations ability to achieve its strategic objectives.
Sustainability – ESG	Risks associated to manage corporate responsibility and sustainable development issues that deliver top and bottom-line growth for the long term, and create maximum impact for beneficiaries.
Talent	Risk arising from increase in staff turnover and well below the industry / market trend, Resignations of staff members, Employee attrition rate more than target rate.
Technology & Cyber	Risk arising from system defects, such as failures, faults, or incompleteness in computer operations, or illegal or unauthorised use of computer systems.

*PESTEL stands for Political, Economic, Social, Technological, Environmental, Legal

Report on Risk Management

Risk Governance Structure

The Company has established three pillars of risk management responsibilities in its Governance structure as Risk Oversight, Risk Infrastructure and Management, and Risk Ownership, that cascades the scope of activities to senior management and all employees across the subsidiaries of the Company.

The risk management governance structure at Persistent is as follows:

Audits

The enterprise-level resilience at Persistent is enhanced continuously through rigorous audits and assessments faced at an entity-level as well as at a functional level, with key improvement suggestions incorporated by the respective teams within their processes and operations. A few examples of the audits and assessments over the last financial year are:

• Internal Audit of Organizational Units

• SOC-2 Type 2 Audit

• Various ISO Audits

• Capability Maturity Model Integration (CMMI) Assessments

Highlights of FY25

As we pursue our goal of reaching the next orbit of $2 billion company in the coming years, we remain focused on enhancing risk management practices in Persistent. Effective change management has led to adoption and enhancement of our Enterprise Risk Management program to proactively identify and report risks. We evaluate emerging risks, risks emanating from uncertain environments, geopolitical changes, ESG landscape, Cybersecurity, and rapidly evolving technological disruptions that we are evaluating and monitoring on a regular basis along with the guidance from the RMC of the Board. This will help the Company to have a holistic understanding and better management of key risks as it plans to achieve its strategic goals and objectives. To effectively track and manage risk at Persistent, The Risk Manager tool has been introduced to digitize risk register for enhanced communication & governance. Additionally, we have the dedicated project risk management tool and contract compliance monitoring & tracking tool deployed to identify, monitor & report risks, assumptions, issues, dependencies for standardize approach across organisation. Persistent is developing a Risk Intelligence platform for risk analytics. Its a single interface to the corporate and function level risks for monitoring and alerting, decision making, predictive analysis through key risk indicators against organisational risk appetite.

At Persistent, successful governance of critical risks is a strategic investment for sustainable growth. It is meant to prepare the Company for a wide range of possible challenges in its growth journey.