Persistent Systems plans salary hikes of up to 14%

Persistent Systems, the Pune-based IT firm, which works in the outsourced product development (OPD) arena, will give a wage hike of between 12% and 14% to its 4,500 employees.

The firm will also add 1,200 people in the current fiscal, according to Anand Deshpande, MD and CEO of Persistent Systems.

“The market demand is gradually improving and people are looking to move from one firm to another. This is why we have also offered wage hikes of between 12% and 14%. We will add 1,200 people this fiscal and in two years our total employee strength will grow to 7,500,” Deshpande told DNA.

Most IT firms have recently offered pay hikes to their employees to contain severe attrition coming close on the heels of the market recovery.

According to analysts, Persistent’s growth will be fuelled by small (under $10 million revenue) and start-up technology firms as venture capital firms are showing greater interest in them.

Yogesh Aggarwal and Atul Aggrawal, analysts with broking firm HSBC Global Research,in a May 19 note to clients, wrote, “The outlook is also bright for Persistent’s start-up clients (25% of revenues), judging by the upbeat mood in the US venture capital market. Even if the macro-economic environment weakens, the smaller clients seem to be well capitalised as shown by resilient revenues from start-ups in the fiscal 2010.”

Persistent’s share in the Indian OPD market rose to 13% in 2009 from about 8% in 2006 and according to HSBC analysts, it would grow to about 15% by 2013.

The company earned revenues of Rs 600.6 crore in the fiscal 2009 and Rs 435.8 crore in the first nine months of fiscal 2010.

Persistent operates as a factory to build products for IT firms such as IBM, Microsoft, Oracle and HP among others. As companies start using technologies such as cloud computing for cost reduction such move will mean more opportunity for Persistent, analysts say.

“The company has an early-mover advantage of working with its clients in next-generation technologies such as cloud computing, enterprise mobility and collaboration tools. Significant investment is being made in these technologies globally and we believe Persistent should continue to be a beneficiary,” the HSBC analysts said.

Persistent looks to invest in a couple of its development centres coming up in Pune and Nagpur.