Persistent Systems shares tumbled over 11 per cent to settle at ₹4,298.50 after hitting a fresh 52-week low of 4,265 after the company announced its intention to launch a voluntary public takeover offer for all outstanding shares of Munich-headquartered digital engineering company Nagarro at €81 per share.
The all-cash offer represents a premium of about 140 per cent to Nagarro’s undisturbed closing price on June 25, 2026, and around 94 per cent to its three-month volume-weighted average price. The sharp decline in the stock came as investors assessed the size, valuation and integration implications of the proposed acquisition.
Persistent said Nagarro’s Management and Supervisory Board support the transaction and intend to recommend acceptance of the offer. The company has already secured an approximately 21 per cent stake in Nagarro, with the German firm’s largest shareholder committing its entire stake under a binding agreement. Nagarro Management Board members have also declared their intention to tender their shareholding into the offer.
Nagarro is a digital engineering company headquartered in Munich with around 18,500 employees across more than 40 countries. The company reported total revenue of €1 billion in CY25 and has a strong presence across industrial, consumer, TMT and BFSI verticals.
Brokerages divided
CLSA maintained its high-conviction outperform rating with a target price of ₹6,520, saying the acquisition should help Persistent achieve its FY31 vision of $5 billion in revenue. The brokerage noted that Nagarro’s FY26 annual revenue of $1.14 billion is around 69 per cent of Persistent’s FY26 revenue. It said the transaction values Nagarro at an enterprise value of $1.4 billion, implying an EV/sales multiple of 1.2x, EV/EBITDA of 9.6x and a price-to-earnings multiple of 13x. CLSA added that despite Nagarro’s lower historical growth and margins compared with Persistent, the deal could be around 6 per cent EPS accretive even at the current purchase price.
PL Capital reiterated a buy rating with a target price of ₹6,400, saying the deal valuation appears relatively fair and should expand Persistent’s addressable market, though it expects near-term margin dilution and no immediate turnaround until integration is completed.
Motilal Oswal also maintained a buy rating with a target price of ₹6,200, while Emkay Global retained its add rating with a target price of ₹5,200.
In contrast, Equirus maintained a reduce rating with a June 2027 target price of ₹5,010, citing the stock’s expensive valuations and limited margin for execution errors amid an uncertain macro environment and increasing client demands to share AI-led productivity gains. Kotak Securities also had a reduce rating at ₹4,700.
Citi retained its sell rating with a target price of ₹4,090. The brokerage said the acquisition would strengthen Persistent’s European presence and improve scale across key verticals, but added that the deal appears expensive given Nagarro’s historical growth trajectory, current global valuations and comparable transactions.
Citi said management expects the acquisition to be cash EPS accretive and EPS accretive, excluding one-off costs, in the first year, but cautioned that investors will need to monitor integration risks in the near term. It also expects the combined entity’s growth rate to be in the low double-digit y-o-y range in the near term.
Nomura maintained a neutral rating with a target price of ₹5,200. The brokerage highlighted that Persistent intends to acquire a 100 per cent stake in Nagarro and delist it from the German stock exchange through an open offer.
It noted that Nagarro generated €1 billion in revenue in CY25, has around 18,500 employees across more than 40 countries and derives approximately 35 per cent of its revenue from North America, 30 per cent from Central Europe, 13 per cent from the rest of Europe and 23 per cent from the rest of the world.
Nomura also said Nagarro reported an adjusted EBITDA margin of 13.8 per cent and EBIT margin of 8.3 per cent in CY25, with margins improving to 15.6 per cent and 12.1 per cent, respectively, in the first quarter of CY26.
Published on June 29, 2026
