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All-around beat; FY27 expected to be better than FY26

* Indegene reported a strong 2QFY27 revenue of INR11.2b (+39.5% YoY/ +5.6% QoQ; MOFSLe: INR10.9b), primarily driven by Enterprise Commercial Solutions, which contributed 71.3% to consolidated revenue.

* EBITDA stood at INR1.9b, with a margin of 16.5% (MOFSLe: INR1.7b/margin of 15.5% in), up 6.6% QoQ and 32.1% YoY.

* PAT stood at INR1.1b (MOFSLe: INR1.1b).

* We expect its revenue/EBIT/PAT to grow 30%/32%/35% YoY in FY27 in INR terms, along with mid-teen organic CC revenue growth and a gradual margin expansion. We value the stock at 25x FY28E EPS to arrive at our TP of INR718. We reiterate our BUY rating on the stock

Our view: Life Sciences and Pharma opex outsourcing key tailwinds

* Management reiterated that FY27 organic revenue growth will exceed FY26 levels, with 2HFY27 expected to outperform 1HFY27, driven by large deal ramp-ups, improving client traction, outcome-based revenue recognition and AI-led productivity gains.

* Large client recovery: A client that slipped below the USD25m+ revenue cohort secured a USD5m+ deal, with management expecting recovery to the higher cohort within 2–3 quarters.

* AI-led growth opportunities: Agentic AOR reduced pharma content development timelines from months to days, driving pilot conversions and opening opportunities for larger enterprise-wide engagements.

* BioPharm-led synergies: Integration of BioPharm's proprietary data and omnichannel capabilities is strengthening cross-selling opportunities, competitive positioning and large-deal conversion.

* Revenue productivity improved, with trailing 12-month revenue per employee increasing to USD79.6k from ~USD69k YoY, supported by GenAIenabled delivery, workforce transformation and increasing adoption of output-based pricing.

* Deal momentum remained strong, with nine USD1m+ ACV wins, including one USD5m+ deal and two USD3–5m deals. Key wins included content platform migration, a global content factory mandate and global digital content management, with meaningful revenue contributions expected from 4QFY27.

* Cash and investments remained strong at INR13.9b, while net DSO increased marginally to 69 days from 67 QoQ.

* Key monitorables:

1) Revenue ramp-up of the USD10m outcome-based omnichannel contract in 4QFY27

2) commercial scaling and adoption of Tectonic and Agentic AOR offerings

3) sustained growth across top-20 clients and customer diversification

4) achievement of a 19%+ EBITDA margin by 4QFY27

5) conversion of strong deal wins into revenue growth and operating leverage in 2HFY27.

Valuation and view

We raise our earnings estimates considering the impact of new deals and the possibility of increased work outsourcing by global pharma and life sciences companies amid expanding drug pipelines, rising clinical trial activity, and increasing regulatory complexity in the life sciences industry. We expect Indegene to deliver a CAGR of 22%/31%/32% in revenue/EBIT/PAT over FY26-28. We reiterate our BUY rating with a TP of INR718 (based on 25x FY28E EPS).

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