Persistent, SRF Stocks Dive 4-5% Post Q3 Results Despite Profit Gains

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AuthorAnanya Iyer|Published at:
Persistent, SRF Stocks Dive 4-5% Post Q3 Results Despite Profit Gains
Overview

Persistent Systems shares dipped 4% following Q3 FY26 results, impacted by an 18% YoY profit increase offset by a 7% QoQ decline and valuation worries. SRF tumbled 5% to a nine-month low, its 60% YoY net profit growth marred by missed revenue estimates and future growth concerns from analysts.

Persistent Systems Faces Investor Scrutiny

Persistent Systems shares saw a 4% decline, reaching a near six-week low on January 21. The IT firm reported a consolidated net profit of ₹439.45 crore for Q3 FY26, marking an 18 percent year-on-year increase. However, this figure represented a 7 percent quarter-on-quarter drop from ₹471.47 crore. Revenue from operations grew 23 percent YoY to ₹3,778.2 crore. CEO Sandeep Kalra highlighted the application of Agentic AI within operations and a focus on sustaining growth. The company also declared an interim dividend of ₹22 per share.

Brokerage Views Diverge on Persistent Systems

Despite the stock's dip, several brokerages maintained an optimistic stance. JM Financial kept a 'Buy' rating, raising its target price to ₹7,600, citing the company's competitive edge in AI-led modernization and strong deal momentum. Choice Institutional Equities also increased its target to ₹7,000 with an 'Add' rating, emphasizing sustained execution and enhanced competitive positioning in enterprise AI. HSBC, however, held a 'Hold' rating at ₹6,560, acknowledging strong growth but suggesting market expectations might be fully priced into the valuation. Nomura maintained a 'Neutral' call with a ₹6,100 target, noting growth was in-line with estimates.

SRF Tumbles to Nine-Month Low

SRF shares experienced a more significant fall, dropping over 5 percent to ₹2,730.10, its lowest point in nine months. The chemical manufacturer reported a Q3 FY26 consolidated net profit of ₹432.66 crore, a robust 60 percent increase from the previous year. Yet, its revenue from operations grew only 6 percent year-on-year to ₹3,712.53 crore, falling short of market estimates.

Growth Constraints Cloud SRF's Outlook

Analysts expressed concerns regarding SRF's medium-term prospects. UBS noted that elevated refrigerant prices, persistent Chinese pricing pressure, and ongoing weakness in the agri-chem segment could constrain growth. The brokerage also pointed out that management has abandoned its prior target of 20 percent specialty-chem growth. This combination of revenue misses and analyst caution weighed heavily on the stock.

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