Persistent Systems Ltd. announces an acquisition

The disclosed transaction size is approximately EUR 1.27 billion, but Persistent did not disclose an exact cash outflow or a committed debt amount. It disclosed a EUR 81-per-share cash offer for 100% of Nagarro and an already secured stake of approximately 21%.^[1]

Funding disclosed

• Transaction value: approximately EUR 1.27 billion enterprise value; this is not necessarily the same as the final equity cash consideration.^[1]
• Equity funding: an equity raise of up to USD 450 million was put before shareholders for approval.^[2]
• Debt plus equity cap: combined equity and borrowings were capped at USD 1.25 billion.^[2]
• Implied maximum borrowing capacity: up to USD 800 million, derived as USD 1.25 billion less the maximum USD 450 million equity raise. This is a ceiling, not a disclosed or committed debt draw.
• Funding mix: the company did not disclose the actual split between cash on hand, equity proceeds and debt, nor the exact consideration paid for the initial 21% stake.

Q1 FY27 balance-sheet impact

As of Q1 FY27, Persistent reported:

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

The reported Q1 FY27 net cash was unchanged from Q4 FY26 at Rs 1,074.9 Crores, while total debt remained zero.^{[5] [4]} Therefore, the Nagarro transaction had no visible impact on Persistent’s reported Q1 FY27 net cash position: the acquisition had not yet translated into a funded debt balance or an observable reduction in consolidated cash by that balance-sheet date.

The transaction timeline expected closing in Q4 CY26 or Q1 CY27, after the acceptance process and required approvals.^[2] Accordingly, the Q1 FY27 balance sheet should be read as a pre-closing balance sheet, rather than evidence of the eventual post-acquisition funding mix.

Nagarro would contribute roughly 37% of pro-forma revenue on a mechanical reported-revenue proxy, while Persistent’s Software & Hi-Tech concentration would fall from 39.8% to approximately 28.7% — an 11.1 pp reduction.

Persistent reported Q1 FY27 TTM revenue of USD 1,717.1 million ^[6], while Nagarro reported CY2025 revenue of EUR 999.3 million ^[7]. Using the unconverted proxy:

`Nagarro contribution = 999.3 / (1,717.1 + 999.3) = 36.8%`

This should be treated as an indicative pro-forma estimate, not a reported consolidated contribution, because the two revenue figures are in different currencies and cover slightly different periods. The transaction was also still subject to completion conditions and approvals, with closing expected in Q4 CY26 or Q1 CY27 ^[2].

Vertical mix impact

Persistent’s Q1 FY27 revenue mix was:

• Software, Hi-Tech & Emerging Industries: 39.8% ^[8]
• BFSI: 34.6% ^[8]
• Healthcare & Life Sciences: 25.6% ^[8]

Nagarro is materially more diversified. Its closest Software & Hi-Tech proxies — Horizontal Tech at 5.1% and TMT at 4.5% — total only 9.6%; its largest vertical is Automotive, Manufacturing & Industrial at 24.9%, followed by Retail & CPG at 13.5% and Travel & Logistics at 9.2% ^[8].

Weighting those mixes using the 36.8% Nagarro contribution implies:

• Software & Hi-Tech: 39.8% → approximately 28.7%
• Non-Software & Hi-Tech revenue: 60.2% → approximately 71.3%

The strategic effect is therefore more than geographic expansion: Nagarro would dilute Persistent’s dependence on its core Software & Hi-Tech franchise and create a broader revenue base across industrial, automotive, retail, travel, public-sector and other verticals. The exact pro-forma percentages remain indicative because the presentation does not provide a formal common-currency, common-period segment bridge.

Nagarro did not contribute a separately reported Q1 FY27 EBIT margin. The full acquisition was still pending, with closing expected in Q4 CY26 or Q1 CY27; therefore, Q1 FY27 did not represent a post-acquisition Nagarro consolidated period. ^[2]

The closest reported comparison is:

On a purely numerical basis, Nagarro’s 13.8% CY2025 adjusted EBITDA margin was 0.1 percentage point below Persistent’s 13.9% Q1 FY27 standalone operating margin. That comparison is only directional because it mixes an annual adjusted EBITDA margin with a quarterly EBIT-based operating margin. Nagarro’s actual Q1 FY27 EBIT margin was not separately reported.

Acquisition-related costs: no specific purchase-price-allocation amortization, acquisition amortization, or integration-cost amount was identified in the cited financial-statement note extracts. The materials establish the transaction terms and timing but do not quantify post-acquisition amortization or integration expenses. Accordingly, the disclosure supports “not separately reported,” not zero cost.