Persistent Systems shares fall after €1 billion Nagarro acquisition offer

Persistent Programs shares tumbled over 11 per cent to settle at ₹4,298.50 after hitting a contemporary 52-week low of 4,265 after the corporate introduced its intention to launch a voluntary public takeover supply for all excellent shares of Munich-headquartered digital engineering firm Nagarro at €81 per share.

The all-cash supply represents a premium of about 140 per cent to Nagarro’s undisturbed closing worth on June 25, 2026, and round 94 per cent to its three-month volume-weighted common worth. The sharp decline within the inventory got here as buyers assessed the scale, valuation and integration implications of the proposed acquisition.

Persistent stated Nagarro’s Administration and Supervisory Board help the transaction and intend to suggest acceptance of the supply. The corporate has already secured an roughly 21 per cent stake in Nagarro, with the German agency’s largest shareholder committing its whole stake underneath a binding settlement. Nagarro Administration Board members have additionally declared their intention to tender their shareholding into the supply.

Nagarro is a digital engineering firm headquartered in Munich with round 18,500 staff throughout greater than 40 international locations. The corporate reported whole income of €1 billion in CY25 and has a robust presence throughout industrial, shopper, TMT and BFSI verticals.

Brokerages divided

CLSA maintained its high-conviction outperform score with a goal worth of ₹6,520, saying the acquisition ought to assist Persistent obtain its FY31 imaginative and prescient of $5 billion in income. The brokerage famous that Nagarro’s FY26 annual income of $1.14 billion is round 69 per cent of Persistent’s FY26 income. It stated the transaction values Nagarro at an enterprise worth of $1.4 billion, implying an EV/gross sales a number of of 1.2x, EV/EBITDA of 9.6x and a price-to-earnings a number of of 13x. CLSA added that regardless of Nagarro’s decrease historic progress and margins in contrast with Persistent, the deal might be round 6 per cent EPS accretive even on the present buy worth.

PL Capital reiterated a purchase score with a goal worth of ₹6,400, saying the deal valuation seems comparatively honest and may increase Persistent’s addressable market, although it expects near-term margin dilution and no quick turnaround till integration is accomplished.

Motilal Oswal additionally maintained a purchase score with a goal worth of ₹6,200, whereas Emkay World retained its add score with a goal worth of ₹5,200.

In distinction, Equirus maintained a scale back score with a June 2027 goal worth of ₹5,010, citing the inventory’s costly valuations and restricted margin for execution errors amid an unsure macro surroundings and rising consumer calls for to share AI-led productiveness good points. Kotak Securities additionally had a scale back score at ₹4,700.

Citi retained its promote score with a goal worth of ₹4,090. The brokerage stated the acquisition would strengthen Persistent’s European presence and enhance scale throughout key verticals, however added that the deal seems costly given Nagarro’s historic progress trajectory, present world valuations and comparable transactions.

Citi stated administration expects the acquisition to be money EPS accretive and EPS accretive, excluding one-off prices, within the first yr, however cautioned that buyers might want to monitor integration dangers within the close to time period. It additionally expects the mixed entity’s progress charge to be within the low double-digit y-o-y vary within the close to time period.

Nomura maintained a impartial score with a goal worth of ₹5,200. The brokerage highlighted that Persistent intends to amass a 100 per cent stake in Nagarro and delist it from the German inventory change via an open supply.

It famous that Nagarro generated €1 billion in income in CY25, has round 18,500 staff throughout greater than 40 international locations and derives roughly 35 per cent of its income from North America, 30 per cent from Central Europe, 13 per cent from the remainder of Europe and 23 per cent from the remainder of the world.

Nomura additionally stated Nagarro reported an adjusted EBITDA margin of 13.8 per cent and EBIT margin of 8.3 per cent in CY25, with margins bettering to fifteen.6 per cent and 12.1 per cent, respectively, within the first quarter of CY26.

Printed on June 29, 2026