US-based UnitedHealth, a manager of organised health systems, is a key client for Persistent and falls into the $100 million-plus relationship category, according to brokerage firm Dolat Capital.
The company, which is also the largest constituent on the Dow Jones Industrial Average Index in terms of weightage, has been facing multiple headwinds over the last few months.
Last month, the company had cut its Earnings per Share (EPS) guidance for the full year. Last week, the company suspended its guidance and also let go of its CEO, saying he had quit for personal reasons.
The Wall Street Journal also reported on Thursday that UnitedHealth is currently under investigation for a potential Medicare fraud. As a result of this report, shares of UnitedHealth fell 8% in extended trading on Wall Street, having declined 18% on Tuesday and close to 1% on Wednesday as well. The stock has declined for seven straight trading sessions.
Dolat Capital wrote in its note that 60% of Persistent Systems’ revenue in financial year 2025 came from the healthcare segment and that near-term growth of the company will be skewed towards non-healthcare clients.
The brokerage also said that rich valuations for Persistent pose a significant risk. Persistent Systems is currently trading at a financial year 2027 price-to-earnings multiple of 40.4 times, which is lower than the five-year average of 62.8 times.
Out of the 23 analysts that have coverage on Persistent Systems, 13 of them have a “buy” rating on the stock, while seven have a “hold” rating. Three of them have a “hold” recommendation.
Shares of Persistent Systems are trading 2.8% lower on Thursday at ₹5,600. The stock still trades 17% below its 52-week high level of ₹6,788.
