Persistent Systems Ltd. announces an acquisition

Persistent did not disclose a settled cash cheque or a committed debt/equity split for Nagarro. It disclosed a headline enterprise value of approximately EUR 1.27 billion, based on an EUR 81-per-share cash offer, while already holding approximately 21% of Nagarro. The exact cash amount payable for the remaining shares, including the cash paid for the 21% stake, was not separately stated. ^[1]

Impact on the Q1 FY27 balance sheet

The consolidated Q1 FY27 balance sheet still reported:

• Cash and equivalents of Rs 1,074.9 Crores ^[3]
• Total debt of Rs 0 Crores ^[4]
• Net debt of negative Rs 1,074.9 Crores, equivalent to net cash of Rs 1,074.9 Crores ^[5]

This net-cash figure was unchanged from Q4 FY26 in the reported series. The disclosed transaction timeline placed expected closing in Q4 CY26 or Q1 CY27, after the Q1 FY27 balance-sheet period. ^[2]

Implication: the Q1 FY27 balance sheet does not yet show Nagarro-related debt funding or a deterioration in reported net cash. The acquisition may ultimately consume cash and introduce borrowings, but the exact cash outflow and final debt drawdown remained transaction-funding parameters rather than reported Q1 FY27 balance-sheet liabilities.

Nagarro would represent roughly 38–40% of the pro-forma revenue base, on a run-rate basis. Using an illustrative EUR/USD rate of 1.10, Nagarro contributes 37.8% of combined revenue; the exact percentage is sensitive to the translation rate because Persistent reports in USD while Nagarro reports in EUR.

Impact on vertical concentration

Persistent’s core Software, Hi-Tech & Emerging Industries vertical represented 39.8% of Q1 FY27 revenue ^[8]. If Nagarro is treated as a separate business unit rather than remapping its verticals into Persistent’s categories, that share mechanically falls to approximately 24.8% of the combined revenue base, a dilution of roughly 15 percentage points derived from the addition of Nagarro.

The shift is economically meaningful: Nagarro brings substantial exposure to Automotive, Manufacturing & Industrial, Retail and CPG, Travel & Logistics, Energy, Public Sector and Consulting, alongside Financial Services and Healthcare ^[8]. Thus, the combined company becomes materially less dependent on Persistent’s historic Software & Hi-Tech concentration.

A narrower category mapping gives a slightly different answer. If Nagarro’s Horizontal Tech (5.1%) and TMT (4.5%) are classified within Software & Hi-Tech, the combined share would be approximately 28.4%, still around 11 percentage points lower than Persistent’s standalone 39.8% share. This mapping is indicative because the two companies do not report identical vertical taxonomies.

Caveat: this is a pro-forma run-rate analysis, not post-closing consolidated revenue. Persistent’s figure is Q1 FY27 annualized, whereas Nagarro’s figure is CY2025 revenue; the acquisition was also subject to closing conditions ^[9].

The cited material does not report a Q1 FY27 EBIT margin for the Nagarro assets. The closest disclosed benchmark is Nagarro’s CY2025 adjusted EBITDA margin of 13.8% ^[7] versus Persistent’s Q1 FY27 standalone operating margin of 13.9% ^[10]—a derived difference of approximately 0.1 percentage point lower for Nagarro. That comparison is not like-for-like: it contrasts an annual adjusted EBITDA margin with a quarterly standalone operating/EBIT margin.

For reference, Persistent’s Q1 FY27 investor presentation reported a company EBIT margin of 16.0% ^[6], while the structured financials show a 15.2% consolidated operating margin and 13.9% standalone operating margin for the quarter ^{[11] [10]}. The presentation also cautions that EBIT and EBITDA are non-GAAP measures whose definitions may not be comparable across companies ^[9].

Acquisition-related cost disclosure

No specific acquisition-related amortization amount, purchase-price-allocation amortization, or integration cost is identified in the cited notes. The transaction timeline placed expected closing in Q4 CY26 or Q1 CY27 ^[2], so Persistent’s Q1 FY27 standalone margin predates the completed acquisition. Accordingly, the available evidence does not support attributing any Q1 FY27 standalone margin movement to Nagarro amortization or integration costs.

Bottom line: Nagarro’s disclosed 13.8% CY2025 adjusted EBITDA margin was broadly close to Persistent’s 13.9% Q1 FY27 standalone operating margin, but there is no verified Q1 FY27 Nagarro EBIT figure or note-level breakdown of acquisition amortization and integration costs in the cited material.