Profit

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604.10
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Updated:23 May, 2019, 15:14 PM IST

BSE
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Updated:23 May, 2019, 15:21 PM IST

From the Chairman's Desk:  

As I share our Twenty Third Annual Report with you, I am pleased to report that the strategy we formulated over the last two years has started to yield results.

Like music, which is a fusion of sound and silence, company strategy must combine different aspects of market realities, internal capabilities and chime in consonance with opportunities to deliver products and services that will resonate with customers. In our quest to provide enduring value to our customers, we decided to extend beyond product engineering by adding three service lines – technology consulting, strategic partnerships to build platform solutions and IP–led business. During this year, we were able to see revenue contributions from these lines of business and that has encouraged us to do more in these areas in subsequent years.

Technology disruptions are driving change and growth. New technologies such as cloud computing and smart mobile devices are getting mainstream in the enterprise and they are forcing the software industry to look at new ways to do business. Smart mobile computing devices such as mobile phones, tablets and sensors are getting all–pervasive in the enterprise. The ability to connect these devices in the cloud and ability to analyze large volumes of data collected through big data technology are creating new possibilities for companies to gather insights into improving the efficiency of their business. Evolution of cloud technology promises significant cost saving to enterprises and helps extend collaboration beyond the enterprise.

These changes provide tremendous opportunities for Persistent. For nearly five years, we have been working with product companies in the areas of cloud computing, analytics, social enterprise and enterprise mobility. The products that we are building with our customers today will be mainstream products in the market tomorrow. Extending our relationships with our customers, we have set up teams that focus on building platform solutions and deploying these solutions in the market. We have observed that our product engineering skills strike a chord with enterprises and are extremely valuable in building platform solutions. This has opened up new markets for us beyond our traditional product developers.

In conversation with our customers, it became clear that our customers have products that are widely deployed but do not fit well in their long–term roadmap. We believe that our experience and ability to build and service products makes us the perfect partner to acquire and extend these products. We started by acquiring two products last year, and during this year, we acquired four such products. This strategy has helped us move our relationship from that of a vendor to a partner and has provided us a seat across the table to discuss product roadmaps. These acquisitions have given us new customers and new relationships for us to extend and build on. These acquisitions have also provided us with anchor teams to enhance our presence near our customers. This will be very important as we broaden our platform solutions business. Financially, focus on IP–led activities has introduced non–linearity in our business. Our revenues in this line of business are no more directly proportional to headcount, providing some diversity in our revenue and profit mix.

I am glad to inform you that over the last two years, we have added diversity to our teams and to our leadership, with individuals from different geographies and with different skills and experience joining Persistent. The fusion of what is existing and what is new has helped us orchestrate harmony, which provides the theme of this year's annual report.

New additions through acquisitions have helped us set up new locations for our offices. Beyond Grenoble, France, we have added development teams at Bengaluru in India, Kuala Lumpur in Malaysia, Seattle in Washington (USA) and Charlotte in North Carolina (USA). Continuing our market expansion, we have added a sales office in Sydney, Australia and signed up partners in South Africa and Morocco.

We continue to invest in new product development and research. Over the last two years, we have set up partnerships with leading national and international research institutions and have established a research center that is recognized by the Indian Government, making our research investment eligible for tax benefits. We take pride in being innovators and early developers of new technology. This can be illustrated by our identification and investments in cloud computing, analytics, social enterprise and enterprise mobility way back in 2009. To provide further impetus to innovation and make innovation all–pervasive, we have created several programs to encourage innovation across all parts of Persistent. These are led by our Chief Innovation Officer. Your Board has approved setting up Persistent Ventures which will explore, partner and fund innovation beyond the confines of Persistent.

Corporate Governance continues to be a focus area for Persistent. With guidance from the Board, I am proud to say that we have continued to push the benchmark in transparency and corporate governance practices across Persistent. We are happy that our efforts have been recognized by fellow professionals.

Persistent has been contributing 1% of the previous year's net profit towards social responsibility for more than 15 years. Persistent Foundation, established in 2009, has done excellent work through projects in healthcare, education and community development. The Foundation has active participation from employees of Persistent across all our centers. Persistent has decided to increase its contribution to socially responsible activities to 1.25% of the previous year's net profit.

The Board of Directors recognizes the importance of shareholder's investment and has consistently increased its dividend payout.

Clearly, the market is changing and the industry is at a crossroad. There are disruptions in the technology landscape and companies are experimenting with different business models. Disruptions provide opportunities for new companies and make new business alignments possible. In a fast–changing world, it is important for leaders in companies to be agile and to respond swiftly to changes in the market.

We have a team that is proud of working at Persistent and believes that we are well–poised to be successful. We have invested in technology areas that are poised for growth and will become waves. We have established partnerships to deploy platform solutions for opening up new markets. IP–led business has allowed us to become true partners for our customers and has provided us diversity in the revenue mix.

Finally, I thank all our shareholders, customers and employees for their continued support and assure them of our sustained best efforts to ensure the success of Persistent.

Sincerely,

Anand Deshpande, Ph.D.

Founder, Chairman and Managing Director 

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