Persistent Systems dropped 5% to an intraday low today at Rs.3989.45 but recouped from these levels and is now trading at Rs.4064.
The stock dropped as the market gave its acquisition a thumbs down. The company announced that it has entered into an agreement to acquire the business of Princeton, New Jersey-based Data Glove Inc.
Though no financial details were mentioned, brokerage houses too showed their disapproval as majority of the analysts feel that this acquisition, though will add to the topline, will dilute EPS and EBIT margins on account of intangible amortisation expenses in the short term.
This acquisition will create a new Microsoft business unit and expand its expertise in Azure-based digital transformation, establishing a new nearshore delivery center in Costa Rica and expanding its presence in the US and India.