Persistent Systems Stock Tanks Over 9% After Nagarro SE Acquisition Deal

Persistent Systems Share Price: The shares of Pune-headquartered Persistent Systems fell as much as 9.10% to hit an intra-day low of Rs 4,400.50 apiece after the company announced two strategic developments, including inking a 6.5-year strategic services deal worth over $650 million with a US-based global technology leader.

The tech giant has also approved acquisition of 100% stake in Germany-listed Nagarro SE through BidCo, including purchase of the 21% stake held by Lantano Beteiligungen at €81/share. The agreement with the Munich-headquartered digital engineering company is to form the Persistent × Nagarro Group. 

Meanwhile, it has also “launched a voluntary public takeover offer for all remaining Nagarro shareholders. Nagarro’s Management Board and Supervisory Board support the transaction and intend to recommend that shareholders accept the offer,” according to the company. 

Making a case for this acquisition, Persistent Systems noted that it has “consistently stated its intent to pursue a complementary acquisition in Europe.”

“Nagarro delivers exactly that: a highly complementary business and a natural strategic fit that elevates the combined group into a global powerhouse in digital and AI-led engineering — a leap that would have taken years to achieve organically,” the company said. 

Further, it said, “The market for AI-led engineering and transformation is consolidating around a small number of partners with the scale, end-to-end offerings, AI platforms, and local presence to serve clients across every major industry.”

What Does This Acquisition Create? 

• This move creates the world’s second-largest digital engineering company by revenue and India’s 7th-largest technology services company, with an annualised revenue run-rate of more than $2.9 billion.
• A transatlantic presence with more than $1.7 billion of revenue from North America, more than $600 million from Europe, and over $400 million from the rest of the world.
• At-scale verticals: more than $500 million each in BFSI, HLS, and TMT; more than $400 million in Industrial; more than $300 million in Consumer; and over $100 million in Public Sector and Education.

Meanwhile, Nagarro’s reported “EBITDA for CY25 was €118.7M (11.9% margin). Management identified €19.5M of one-time items — including a €12.4M India Labour Code impact which increase Reported Adjusted EBITDA to €138.2M (13.8%). The TTM Mar’26 Reported Adjusted EBITDA was €139.1M (13.9%),” as per Persistent Systems. 

"Separately, and subject to further review by auditors, a €15.5M unrealized foreign-exchange loss on intra-group loans may be added back. Including it, CY25 Adjusted EBITDA is €153.7M (15.4%) and Adjusted EBIT is €118.0M (11.8%). On a TTM Mar’26 basis, Adjusted EBITDA is €154.6M (15.5%) and Adjusted EBIT is €119.1M (11.9%)," it said. 

The treatment of FX gains and losses within EBITDA is subjective and depends on the nature of the underlying transaction; Persistent records this expense below EBITDA, as per the company.