Persistent Systems Ltd. announces an acquisition

The disclosed transaction cash requirement is approximately EUR 1.27 billion at EUR 81 per Nagarro share; it is not an exact cash amount already paid. Persistent disclosed the following funding structure:

The exact cash paid for the already secured approximately 21% Nagarro stake is not separately stated in the transaction disclosure; therefore, the final cash outflow cannot be reconstructed precisely from the reported figures. Persistent also did not disclose a final drawn-debt amount or a percentage split between debt and equity. ^[1]

Impact on Q1 FY27 net cash: none yet. The acquisition was still expected to close in Q4 CY26 or Q1 CY27, after the 30 June 2026 Q1 FY27 balance-sheet date. ^[3] At Q1 FY27, Persistent reported consolidated cash and equivalents of Rs 1,074.9 Crores, total debt of zero, and net debt of negative Rs 1,074.9 Crores—i.e., net cash of Rs 1,074.9 Crores. ^{[4] [5] [6]}

Thus, the Q1 balance sheet is a pre-acquisition net-cash position. It should not be adjusted by subtracting EUR 1.27 billion or by adding EUR 1.4 billion of debt: neither the final cash settlement nor debt drawdown was reflected as of Q1 FY27. After closing, the net-cash impact will depend on the actual consideration paid, debt drawn, equity raised, and transaction costs.

Nagarro would represent roughly 36% of pro-forma revenue on a Q1 FY27 annualized basis, using a neutral 1:1 EUR/USD illustration. Persistent’s core Software, Hi-Tech & Emerging Industries contribution would decline from 39.80% to approximately 25.64%, a dilution of 14.16 percentage points.

Pro-forma revenue bridge

The strategic shift is meaningful because Nagarro adds a much broader industry mix. Its largest vertical is Automotive, Manufacturing & Industrial at 24.9%, followed by Retail & CPG at 13.5%, Financial Services & Insurance at 12.4%, and Travel & Logistics at 9.2%. Its explicitly technology-labelled buckets—Horizontal Tech and TMT—account for only 9.6% combined ^[9]. This points to a lower dependence on Persistent’s legacy technology-heavy vertical base and greater exposure to industrial, consumer, travel, public-sector and other enterprise end markets.

Caveat: the 35.58% and 25.64% figures are analytical illustrations, not company-reported consolidated pro-forma numbers. Persistent reports revenue in USD, Nagarro in EUR, and the presentation does not provide a combined EUR/USD bridge or harmonized vertical taxonomy. Also, the transaction was still scheduled for closing in Q4 CY26 or Q1 CY27 ^[3]. Incorporating Nagarro’s 9.6% technology-labelled mix would make the residual core-tech concentration somewhat higher, but the direction of travel remains clear: materially lower concentration in Software & Hi-Tech.

The requested comparison is not directly reported on a like-for-like basis. Nagarro’s disclosed profitability figure is a CY2025 adjusted EBITDA margin of 13.8%, not a Q1 FY27 EBIT margin. Persistent’s Q1 FY27 standalone operating margin was 13.9%. ^{[8] [10]}

• Persistent standalone: Q1 FY27 EBIT was Rs 573.07 Crores and revenue was Rs 4,117.8 Crores; the reported operating margin was 13.9%. ^{[11] [12] [10]}
• Nagarro: CY2025 adjusted EBITDA was EUR 138.2 million on revenue of EUR 999.3 million, implying the reported 13.8% adjusted EBITDA margin. ^[8]
• Read-through: The two margins are numerically close, with Nagarro’s disclosed margin about 0.1 percentage point below Persistent’s standalone operating margin, but the comparison is weak because it matches CY2025 adjusted EBITDA against Q1 FY27 EBIT/operating margin. Persistent’s presentation also cautions that non-GAAP measures, including adjusted EBITDA, may not be comparable with similarly titled measures. ^[13]

Acquisition-related charges

No financial-statement note breakdown was reported in the cited material for:

• amortization of acquired customer relationships, technology or other identifiable intangibles;
• transaction or advisory expenses;
• integration, restructuring or implementation costs; or
• the amount of any such charges included in Q1 FY27 earnings.

Accordingly, there is no supported amount to attribute to Nagarro-related amortization or integration costs. Also, the transaction timeline described expected regulatory closing in Q4 CY26 or Q1 CY27, so the Q1 FY27 Persistent standalone/consolidated margins should not be assumed to include a full-quarter contribution from Nagarro. ^[3]