Persistent Systems Shares Drop Nearly 3% Amid Turmoil at Key US Client UnitedHealth

Market Performance

Persistent Systems shares witnessed a sharp decline in Thursday's trading session following negative developments at one of its largest US clients, UnitedHealth Group.

• Intraday, the stock fell 3.59% on the NSE, reaching a low of Rs 5,552
• It recovered slightly to trade at Rs 5,589.5, still down 2.93% by 12:30 PM
• Over the past three trading sessions, the stock has dropped nearly 5%

This decline in Persistent Systems shares came as a direct reaction to growing uncertainties surrounding UnitedHealth, which significantly contributes to the Indian IT firm’s revenue.

Main News

The fall in Persistent’s stock price was triggered by the sudden resignation of UnitedHealth Group CEO, Andrew Witty, who stepped down citing personal reasons. In addition, UnitedHealth has withdrawn its financial forecast for 2025, adding to market concerns.

UnitedHealth’s shares themselves saw a massive 15% plunge in the US markets, compounding the pressure on partners like Persistent Systems.

Company Details

Persistent Systems, headquartered in Pune, is a prominent IT services company that relies heavily on the healthcare sector for its revenues.

• UnitedHealth is among Persistent’s top clients, contributing over $100 million in revenue
• Approximately 60% of Persistent's FY25 revenue is expected to come from the healthcare vertical
• With uncertainty in the US healthcare sector, growth is now expected to shift to non-healthcare domains

UnitedHealth has been dealing with multiple crises over the past year, including:

• A cyberattack on its tech division affecting 190 million people
• A federal investigation into alleged Medicare billing fraud
• Escalating medical costs that led to its first earnings miss since 2008

These events have sparked concern among investors and stakeholders globally.

Summary

The abrupt leadership change and financial forecast withdrawal at UnitedHealth Group have significantly impacted Persistent Systems shares, which rely heavily on this major client. The near 3% drop reflects growing investor apprehension. With over 60% of revenues tied to the healthcare domain, Persistent now faces potential revenue diversification challenges. The situation remains fluid and will likely influence stock movement in the coming weeks.