Quant-Funda : Buy between Rs. 39– 41 Sagility Ltd For Target Rs. 50 - Geojit Investments Ltd
Fundamental View
Sagility Ltd. is a healthcare-focused, technology-enabled solutions provider primarily serving U.S. health insurers (payers), along with hospitals, physicians, and medical device companies (providers). Headquartered in Bengaluru, the company operates 33 delivery centers across India, the U.S., and other global markets. In Q3FY26, ~90% of its revenue was generated from payers, with the balance contributed by the provider segment.
* Sagility reported a strong Q3FY26, with revenue rising 36% YoY on the back of growth in existing clients and new order wins. EBITDA margin stayed healthy at ~26%, while adj. PAT grew 23% YoY to Rs 268cr, although impacted by a one-time labour code charge of Rs 32.8cr.
* AI adoption is emerging as a key growth catalyst, with 32 GenAI use cases deployed across 10 clients, driving productivity gains, faster turnaround times, and deeper client engagement.
* Business diversification continued to improve, with top-10 client concentration declining to ~84.6% (from ~90.5% in FY25), supported by the launch of the Medicare Advantage platform Sagility Synchrony and a rising offshore mix enhancing operational efficiency.
* As per market consensus, Sagility trades at ~16x one-year forward P/E, below its post-listing average of ~25x. The valuation appears attractive given resilient revenue visibility, strong order pipeline, higher offshore mix, and expanding technology- and AI-led capabilities, supporting sustained earnings compounding and margin stability
Technical View
• The stock has recently shown signs of stabilization after a sharp corrective phase, with price action indicating a potential base formation at lower levels.
• A bounce from a key trend zone reflects emerging buying interest; however, the broader price structure still indicates recovery within a corrective trend.
• The RSI has rebounded from lower levels and is moving toward the mid-zone, indicating gradual improvement in momentum after an oversold phase. The MACD remains in negative territory but shows early signs of flattening, suggesting weakening bearish momentum and potential for stabilization.
• Initiate long positions between Rs 39–Rs 41, maintain a stop-loss at Rs 35, and target Rs 50, offering a favourable risk–reward aligned with the prevailing bullish trend.
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