Persistent Systems said enterprises are increasingly adopting artificial intelligence (AI) to improve productivity, with most projects being funded through existing technology budgets rather than fresh IT spending, Chief Financial Officer Vinit Teredesai told TNIE.
"Everything that the customer expects from us is to do more with less, provide more value with them for the same dollar that they are spending. And that's where the AI story is going," Teredesai said.
He added that outcome-based pricing for AI projects remains in the early stages and could take "a couple of quarters" to gain traction.
The company estimates AI tools can lower delivery costs by 20-25%, although the benefit varies depending on the customer's readiness to adopt the technology and the service provider's ability to deploy it.
Persistent reported consolidated revenue of Rs 4,303.2 crore for the quarter ended June, up 6.1% quarter-on-quarter and 29.1% year-on-year. Consolidated net profit stood at Rs 483.0 crore, down 8.7% sequentially due to foreign exchange losses but up 13.7% from a year earlier. EBIT margin was 16.0%, compared with 16.3% in the previous quarter and 15.5% a year earlier.
On profitability, Teredesai attributed the sequential decline in margin to planned hiring ahead of expected project ramp-ups and said the company continues to target an operating margin of 16-17%.
He also said the foreign exchange loss reported during the quarter was largely unrealised and expects it to normalise during the year unless currency movements become unusually volatile.
Teredesai said customers are seeking measurable productivity gains rather than spending more on technology, making AI adoption a competitive requirement for IT services companies.
The company reported a record quarterly total contract value (TCV) of $1.15 billion during the quarter, including a strategic services agreement worth more than $650 million.
He said that enterprise decision-making remains challenging despite an increase in large deal announcements across the industry. Persistent's largest deal during the quarter was secured through a long-term proactive engagement rather than a formal request-for-proposal process, he said.
Looking ahead, Teredesai said the company believes it is well placed to achieve its target of $2 billion in annual revenue by FY27, provided it executes well and converts its deal pipeline into revenue.
