Synopsis: The healthcare-focused BPM player kicked off the new fiscal year with a beat on revenue estimates and resilient margins despite wage-related cost pressure, prompting both brokerages tracking the stock to reiterate their ‘Buy’ calls. The debate now is less about the quarter itself and more about how much of FY26’s pace can carry into a base-heavy FY27.
A seasonally soft opening quarter turned out stronger than expected, with revenue growth outpacing estimates even as margins held firm through wage hikes and cost pressures. Both brokerages covering the stock came away reassured rather than cautious, pointing to steady guidance, a completed acquisition, and a broadening client base as reasons the growth story still has room to run.
With a market capitalization of approximately Rs. 19,343 crore, the shares of Sagility India Limited were trading at Rs. 41 per share, with a 52-week range of Rs. 58 to Rs. 36, and they are trading at a P/E of approximately 19x.
ICICI Securities: Good Execution In A Seasonally Weak Quarter
ICICI Securities has maintained its ‘Buy’ rating, revising its target price to ₹54 from ₹51, implying an upside of roughly 31% from current levels. The brokerage noted a slight beat on its Q1FY27 revenue growth estimate of 15.2% YoY in constant currency, alongside an in-line EBITDA margin of 23.8%, up 130 bps YoY. Growth was led by the payer segment, which grew 29.4% YoY, even as the provider segment’s momentum has slowed to 14% over the past two quarters.
It flagged that margin performance stayed resilient despite the usual wage hikes and a roughly 120 bps impact from the minimum wage revision in Karnataka and Telangana. Annual contract value stood at USD 35.3 million, up 15% QoQ, while the client base rose to 109, up from 82 in FY26 and, cannibalization from AI could pose a 2–3% headwind in FY27. ICICI has trimmed its FY27–28 EPS estimates marginally and values the stock at 17x one-year forward earnings.
Motilal Oswal: FY27 Seen As A Year Of Normalization
Motilal Oswal has also retained its ‘Buy’ rating, with a target price of ₹57, the higher of the two on the Street, implying an upside of around 38%. The brokerage highlighted that INR revenue came in at ₹1,963.5 crore, up 27.6% YoY, ahead of its estimate of ₹1,886 crore, while EBITDA of ₹438.2 crore and PAT of ₹216.8 crore also beat forecasts, growing 26.6% and 45.9% YoY, respectively.
It expects FY27 to mark a normalization year given the high base set by FY26’s 29.1% revenue growth, with growth settling into low double digits going forward. Still, it sees new client additions from the CareSeed acquisition, cross-selling opportunities, and acquisition-led synergies driving a revenue-EBITDA-PAT CAGR of 19%/19%/23% over FY26–28. Motilal Oswal values the stock at 19x FY28 estimated earnings to arrive at its target.
Business Updates
During the quarter, the company completed its acquisition of CareSeed, a US-based healthcare analytics firm, adding 30 clients and strengthening its quality-reporting and Medicare Advantage capabilities. Together with an earlier acquisition, this has expanded the client base to 109 active client groups, up from 82 in FY26, with the top-10 client concentration easing to 84.1% from over 90% a few years ago, reflecting a broader, less concentrated revenue base.
Management has reiterated its FY27 guidance of low double-digit organic constant-currency revenue growth and an adjusted EBITDA margin of 24–25%, with scope to trend toward the upper end if the final wage impact comes in lower than currently assumed.
With both brokerages backing the stock despite a high FY26 base and looming cost headwinds, the coming quarters will show whether steady execution and cross-selling from recent acquisitions are enough to sustain the growth pace guided for FY27.
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