Motilal Oswal’s Report on Persistent Tie-up with IBM Watson. http://www.motilaloswal.com/site/rreports/HTML/635942347351955944/index.htm
Disc: Have entered this stock over the past month
I can tell from my experience, mid sized IT companies are tremendous pressure to reduce the billing rate. Digital transformation is something new that PSY is doing unique. All the players are doing the same or trying to do the same. I am not sure why it is having a PE of 18-20. In all big accounts and for all customers, all big players are not giving an inch to any anybody as they want to keep market pie. In the backdrop, no wonder PSY’s margin is coming down. In fact , no wonder all Mid Caps are getting sold out to VCs and PEs. Things will turn more interesting now
Disc. Not invested in PSY.
Understanding how the future will unveil itself through cognitive IOT, the potential and opportunities that new era technologies like IBM Watson will bring along:
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Today came to know from one of the business channel that IBM has posted worst ever result and a continuous miss for consecutive 16th quarter. Even cloud computing has not given much respite. So does this mean anything serious to persistent? Would like to know your views
first thing is that persistent has tie up with IBM watson for internet of things and it will start giving results after two to three years
Revenue guidelines is missed but it mainly due to not been able to generate proper revenue from the acquisitions. But this is quite understandable as IBM has completed 10 acquisitions recently. But as per the management the long term view remain intact. Please find the summary of the report.
IBM WATSON IS LIKE MAKE OR BREAK FOR IBM…let’s see whether it clicks in IOT or not
Through a general Google search and LinkedIn searcg, I got an employee who was in IBM and is transferred to Persistent, presumably under the deal. His name is Chris McGee.
His profile says currently working with Persistent on “Client, Server and Web development for an IoT middleware application”
And in IBM, he was working on “Core developer on the Rational Team Concert Source Control system.”
https://ca.linkedin.com/in/cbmcgee
Anyone can join the dots to make sense of the opportunity?
satya
no dividend declared
Nice article by DYNAMIC LEVELS …
http://www.moneycontrol.com/mccode/news/article/article_pdf.php?autono=6439901&num=0
I work in IT Industry in sales and here are my thoughts on PSL and IT Services in general
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Rupee has fallen from 45 to 67 in 4 years, that’s 50% fall. Any company generating revenue in $s get’s 50% increase in revenue in Rs terms even if there is no growth in real business( $ terms). Same is case of PSL revenue. Revenue growth in USD terms is not as impressive as it looks in Rs terms.
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Technology space is changing rapidly, but generally that doesn’t affect any IT Services Company. After a while company manages to get resources trained on newer technology. That’s the reason most of the Large & Mid sized companies offer everything that has some demand. So never worry about either PSL or any other service company adapting to change. Yes adapting to change earlier can get you some advantage for a while. BUT not being able to a technology for some time is not going to bankrupt company, it’s just missed revenue. It’s completely fine to generate revenue from dead old technology as long as there is still scope of growth in that tech.
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People at very top are real assets of the company. CEO matters a lot. Growth rate of every single company changes with change in CEO(and his team). E.g. Wipro under Vivek Paul or Azim Premji, Infy under NRN & Nandan Nilekani, HCL under Shiv Nadar, MindTree under Ashok Soota grew faster than before/after same guys. Growth generally changed within quarters.
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Except above factor, past growth of an IT Company is comparatively good indicator of future growth. Because growth of Service Company is function of Sales & Delivery capabilities(i.e. Processes and People at very top). If you look at last 10 years history, most(not all) of the companies are growing at same growth rate relative to each other. I.e. When TCS was growing at 40%s, Infy was at 35%; TCS slowed down to 10%, Infy slowed to 8%.
Feel free to comment…
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I understand that Persistent management has set themselves a target to make it a billion dollar company. Also, it has forayed into IoT with alliance with IBM. So going forward, it may be able to have a big pie of IoT compared to its present size. So it will be interesting to watch in few years to come.
update on businessline http://www.thehindubusinessline.com/portfolio/firm-calls/persistent-systems-promising-platform/article8663395.ece
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On the Appian way, speed thrills!
By Sudhir Kulkarni Posted May 26, 2016 In Digital Transformation
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It’s now been a couple of months since we undertook a major transformation and aligned Persistent Systems to focus on four major growth areas; Digital, Services, IBM and Accelerite. I’m already seeing the results of that focus in our Digital business and it’s very exciting. We talk about disruption by design and what we mean by that is disruption shouldn’t be passive. In fact, our customers aren’t being disrupted, together we’re actually making that disruption happen. That is most evident in Digital. And what really counts is speed. People say speed kills, but in the case of digital, speed thrills, and we’re seeing that with one of our key platform partners, Appian.
I was at the Appian World conference earlier this month and it was, in a word, amazing. The first thing that hit me was the fact that Appian is moving from being a business process management software platform, to a low-code customized application building engine. That leads to speed to digital experiences and this ties in beautifully to our philosophy of digital transformation, which is to build the best experiences possible and lead with that. This truly symbiotic relationship between Appian and Persistent is resonating strongly with our customers.
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Hi Avdhesh
What this has to do with Persistent ?
what this post has to do with persistent in particular ?
has some body compared in the mid IT segment, the margins of Eclirix , where that has sustained more than 35% margins over a long period of time and is still available at the same PE as Persistent or Mind Tree
any thoughts ,
they may be in different fields , but at the end of the day what we are looking at is the margins sustainability