Credit Rating- Revision

NSE & BSE / 2026-27 / 082 July 7, 2026 The Manager, The Manager, Corporate Services, Corporate Services, National Stock Exchange of India Limited BSE Limited Exchange Plaza, Bandra Kurla Complex, Bandra (E), P J Towers, Dalal Street, Mumbai 400 051 Mumbai 400 001 Ref: Symbol: PERSISTENT Ref: Scrip Code: 533179 Dear Sir/Madam, Sub.: Intimation of revision in the Credit Rating issued to the Company by M/s. ICRA Limited Ref. : Our earlier letters bearing Ref. Nos.: a. NSE & BSE / 2025-26 / 235 dated March 5, 2026 b. NSE & BSE / 2024-25 / 223 dated January 21, 2025 M/s. ICRA Limited had assigned the '[ICRA] AA+ (Stable)' Rating to Persistent Systems Limited vide its letter dated January 21, 2025, which was subsequently reaffirmed vide its letter dated March 5, 2026. Pursuant to Regulation 30 of the SEBI (LODR) Regulations, 2015, we wish to inform you that ICRA vide its letter dated July 7, 2026, has revised the same in view of the announcement of proposed acquisition of Nagarro SE bearing Ref. No. NSE & BSE / 2026-27 / 066 on June 27, 2026. A copy of the Rating letter along with Rating Rationale received from M/s. ICRA Limited is attached to this letter. Please acknowledge the receipt. Thanking you, Yours sincerely, For Persistent Systems Limited Amit Atre Company Secretary ICSI Membership No.: ACS 20507 Encl.: As above Persistent Systems Limited, Bhageerath, 402 Senapati Bapat Road, Pune 411 016, Maharashtra, India CIN - L72300PN1990PLC056696 Tel: +91 (20) 6703 5555 | Fax - +91 (20) 6703 6003 | E-mail - info@persistent.com | Website - www.persistent.com ICRA Limited ICRA/Persistent Systems Limited/07072026/1 Date: July07, 2026 Mr. Vinit Teredesai Chief Financial Officer Persistent Systems Limited Bhageerath, 402, Senapati Bapat Road, Pune -411016 Dear Sir, Re: Persistent Systems Limited This is inreference to the periodic monitoring of ICRA-assigned credit rating for thementioned instruments of your company. Based on the announcement ofthe proposed acquisition of Nagarro SE on June 27, 2026, the Rating Committee of ICRA has taken the following rating action. Rated Amount Instrument Rating Action1 (Rs. crore) [ICRA]AA+; placed on rating watch with negative Issuer Rating - implications Total - The Rating assigned must be understood solely as an opinion and should not be treated, or cause to be treated, as recommendation to buy, sell, or hold the rated Instrument availed/issued by your company. We look forward to your communication and assure you of our best services. With kind regards, For ICRA Limited Sujoy Saha Vice President sujoy.saha@icraindia.com 1Complete definitions of the ratings assigned are available at www.icra.in. BBuuiillSddeiinnnggs NNitooiv.. i88ty,, 22LnadbFelolo :r ,R Teoswtreirc Ated Tel.: +91.124 .4545300 Website: www.icra.in DDLLFF CCyybbeerr CCiittyy,, PPhhaassee IIII CIN: L749999DL1991PLC042749 Email: info@icraindia.com GGuurruuggrraamm 112222000022,, HHaarryyaannaa Helpdesk: +91 9354738909 Registered Office: B-710, Statesman House, 148, Barakhamba Road, New Delhi 110001. Tel.: +91.11.23357940-41 RATING RESEARCH INFORMATION July 07, 2026 Persistent Systems Limited: Placed on Rating Watch with Negative Implications Summary of rating action Previous rated Current rated Instrument^ amount amount Rating action (Rs. crore) (Rs. crore) [ICRA]AA+; placed on Rating Watch with Issuer Rating - - Negative Implications Total - - ^Instrument details are provided in Annexure II Rationale Material event On June 27, 2026, Persistent Systems Limited (PSL) announced a voluntary public takeover offer for Nagarro SE (Nagarro), a Germany-headquartered global digital engineering and technology services company, listed on the Frankfurt Stock Exchange. PSL, through its German subsidiary (Galaxy Germany Holding SE), signed a share purchase agreement to acquire a 21% stake in Nagarro from Lantano Beteiligungen GmbH and has made an open offer at EUR 81 per share to acquire a controlling stake, subject to a minimum acceptance threshold of 50% plus one share, with an eventual target holding of 100%. The offer price implies an enterprise valuation (EV) of around EUR 1.27 billion for Nagarro, translating into an EV/Revenue multiple of around 1.27 times and an EV/OPBDITA multiple of around 9.1 times. The proposed transaction is subject to regulatory approvals and fulfilment of customary conditions precedent and is expected to be completed by Q4 CY2026/Q1 CY2027. Impact of material event ICRA has placed the rating of PSL on Watch with Negative Implications following the announcement of the proposed acquisition of Nagarro, reflecting the uncertainty around the final stake acquired, resultant leverage, overall credit metrics and the expected pace of deleveraging, clarity on which will be critical from a credit perspective. The revenues of PSL and Nagarro stood at USD 1.6 billion and USD 1.1 billion, respectively, in FY2026. The proposed acquisition is expected to strengthen the company’s business profile through a significant increase in scale, broadening its geographic and industry diversification, expanding service capabilities and access to a larger client base. Nagarro's established presence in Europe complements PSL's North America-centric operations and would improve the geographic diversification of the combined entity. Consequently, the revenue contribution from North America is expected to decline to 62% from 81% , while that from Europe is likely to increase to 22% from 9%. PSL has an established presence in telecommunications, media and technology (TMT), banking and financial services (BFSI) and healthcare and life sciences (HLS) industries. The acquisition is expected to deepen the company’s presence in the TMT, BFSI and HLS segments and also lead to a significant diversification into the industrials, consumer and public sector segments where Nagarro has a firm footprint. The acquisition will also enhance PSL’s capabilities in artificial intelligence, digital engineering and enterprise resource planning. The combined entity would have more than 46,000 employees (as compared to the existing employee base of more than 27,500) across over 40 countries (as compared to over 21 countries at present) and is expected to generate annual revenues of around USD 2.9 billion initially, with further growth potential over time. The operating margin of Nagarro is relatively lower (12.1% in CY2025) than that of PSL (19.0% in FY2026). Hence, the blended operating margin of the consolidated entity is likely to moderate to some extent. However, synergies expected from leveraging of complementing capabilities of the entities are likely to be value-accretive. The transaction, however, is sizeable relative to PSL's existing scale and is proposed to be funded entirely through debt. The acquisition will be financed through a committed bridge financing facility of EUR 1.4 billion, covering both the acquisition www.icra .in 1 Sensitivity Label : Restricted Page | funding and refinancing of Nagarro's existing debt. Consequently, PSL's consolidated leverage, post-acquisition, is expected to increase materially and is likely to be in the range of 2.0-4.5 times over the medium term. As per ICRA’s estimates, the total debt relative to OPBDITA for the combined entity will remain materially above the stipulated negative trigger threshold of 1.3 times at least till FY2029, if 100% stake acquisition were to happen. Further, it also exposes the company to refinancing risk owing to the short-term nature of the acquisition debt. Accordingly, while the proposed acquisition has the potential to materially strengthen PSL's business profile going forward, it is expected to weaken its financial risk profile in the medium term because of the debt-funded nature and size of the transaction. ICRA will continue to monitor the progress of the transaction, including the final acquisition structure, funding arrangements, integration plans and leverage levels, and will take appropriate rating action on [Showing first 8,000 characters — download PDF for full document]