Persistent Systems Declines 1.85% Amid Rising Open Interest and Put Option Activity

27 January: Open Interest Surge Amid Mixed Price Action

On 27 January 2026, Persistent Systems saw a significant 13.3% increase in open interest in its derivatives segment, rising from 25,832 to 29,260 contracts. Futures volume was robust at 23,364 contracts, with a combined derivatives turnover of approximately ₹45,342 lakhs, highlighting strong market activity. Despite this, the stock price rose modestly by 1.22% to close at Rs.6,222.30, underperforming the Sensex gain of 0.50% and the sector’s 0.92% rise.

Technically, the stock remained above its 100-day and 200-day moving averages, signalling a longer-term bullish trend, but traded below its 5-day, 20-day, and 50-day averages, indicating short-term pressure. Delivery volumes declined sharply by over 30%, suggesting reduced long-term investor participation amid volatile price action.

27 January: Mojo Grade Downgrade Reflects Valuation Concerns

MarketsMOJO downgraded Persistent Systems from a 'Strong Buy' to a 'Buy' rating on 27 January 2026, citing valuation concerns despite strong fundamentals. The company’s average Return on Equity (ROE) stood at 21.92%, and Return on Capital Employed (ROCE) at 29.52%, reflecting operational efficiency and profitability. The debt-free balance sheet further supports financial discipline.

However, the stock’s Price to Book ratio of 13.8 and PEG ratio of 1.6 indicate a premium valuation that may limit upside potential. The stock’s modest 2.89% return over the past year contrasts with a 36.5% profit increase, suggesting a disconnect between earnings momentum and share price appreciation. Institutional investors hold a significant 52.61% stake, providing stability despite the downgrade.

28 January: Price Slightly Declines Amid Rising Sensex

On 28 January, Persistent Systems’ share price slipped 0.17% to Rs.6,211.60, while the Sensex surged 1.12% to 36,188.16. The stock’s underperformance continued despite the broader market rally, reflecting investor caution. Volume dropped to 10,362 shares, and delivery volumes declined further, signalling reduced conviction among long-term holders.

29 January: Heavy Put Option Activity Signals Bearish Sentiment

Persistent Systems emerged as one of the most actively traded stocks in the put options segment on 29 January, with 3,387 contracts traded at the ₹6,000 strike expiring 24 February 2026. This generated a turnover of approximately ₹6.57 crores, indicating increased bearish positioning or hedging ahead of expiry. Open interest at this strike stood at 531 contracts, highlighting sustained bearish interest.

The stock price declined sharply by 2.31% to Rs.6,068.10, underperforming its sector and the Sensex. The weighted average traded price was closer to the day’s low of Rs.6,001, signalling selling pressure. Technical indicators showed the stock trading below its short-term moving averages but above long-term averages, reflecting mixed momentum.

Delivery volumes fell by 54.88% to 1.71 lakh shares, reinforcing the cautious stance. Despite this, liquidity remained adequate for sizeable trades, supporting institutional and retail activity.

29 January: Sharp Open Interest Rise Amid Price Decline

On the same day, open interest surged 10.55% to 31,655 contracts, accompanied by futures volume of 17,499 contracts and a combined futures and options value exceeding ₹22,133 lakhs. This increase in open interest amid falling prices suggests fresh short positions or accumulation at lower levels, reflecting divergent market views.

The stock’s market capitalisation stood at ₹95,109 crore, with a mojo score of 77.0 and a Buy rating. The downgrade from Strong Buy reflects a more cautious outlook amid recent volatility. The decline in delivery volumes and underperformance relative to peers highlight the need for prudent risk management.

Key Takeaways

Positive Signals: Persistent Systems maintains strong fundamentals with a mojo score of 77.0 and a Buy rating. The company’s debt-free balance sheet, high ROE of 21.92%, and ROCE of 29.52% underpin its operational strength. Long-term moving averages provide technical support, and institutional ownership remains robust at 52.61%.

Cautionary Signals: The stock underperformed the Sensex by 3.47% over the week, declining 1.85% amid rising open interest and heavy put option activity, signalling increased bearish sentiment. Delivery volumes have dropped sharply, indicating waning investor conviction. The downgrade from Strong Buy to Buy reflects valuation concerns, with a high P/B ratio of 13.8 and PEG of 1.6 suggesting limited near-term upside.

Derivatives market data reveals active repositioning, with rising open interest amid falling prices often indicating fresh short positions or hedging. The concentration of put options at the ₹6,000 strike price ahead of February expiry points to expectations of volatility or downside risk.

Conclusion

Persistent Systems’ week was marked by a divergence between strong fundamental quality and short-term technical weakness. While the company’s financial metrics and market position remain solid, the stock’s price action and derivatives activity reflect a cautious market stance. The downgrade in mojo grade and increased bearish options activity suggest investors are managing risk amid valuation concerns and near-term uncertainty.

Investors should monitor open interest trends, price movements relative to key moving averages, and delivery volumes to gauge evolving sentiment. The stock’s liquidity and institutional backing provide a stable base, but the current environment calls for prudence given the mixed signals from price and derivatives markets.

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