Persistent Systems fell 1.62% to Rs 5667.15, following reports that its key client UnitedHealth Group is under a criminal investigation for potential Medicare fraud.
According to the media reports, the U.S. Department of Justices healthcare fraud unit is investigating UnitedHealth's Medicare Advantage business practices. UnitedHealth has responded by affirming its confidence in the integrity of the program.UnitedHealth is reportedly among Persistent Systems top five clients, reportedly accounting for an "over $100 million" business relationship. However, the exact revenue exposure of Persistent Systems to UnitedHealth remains unclear.
The news comes on the heels of additional turbulence at UnitedHealth. On Tuesday (13 May), the company announced that CEO Andrew Witty would step down for personal reasons. Chairman Stephen Hemsley, who previously served as CEO from 2006 to 2017, has returned to the role, effective immediately. Witty will stay on as a senior adviser.
UnitedHealth cut its 2025 forecast last month following its first quarterly earnings miss in more than a decade. On Tuesday (13 May) the company withdrew that financial forecast entirely, saying that medical costs from new Medicare Advantage members were higher than expected.
UnitedHealth, which serves over 50 million Americans, is the largest provider of Medicare Advantage plans, with more than 8 million enrollees. It also operates a major pharmacy benefit manager and the Optum healthcare services division.
Persistent Systems is a global services and solutions company delivering digital engineering and enterprise modernization to businesses across industries. Its net profit advanced 6.1% to Rs 395.76 crore on a 5.87% increase in revenue to Rs 3,242.11 crore in Q4 FY25 over Q3 FY25. However, on a year-on-year basis, the company's consolidated net profit gained 25.51% on a 25.15% increase in revenue in Q4 FY25 over Q4 FY24.
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