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Informist, Saturday, Jul. 18, 2026

 

By Shakshi Jain

 

NEW DELHI – Sagility Ltd. is expected to post a moderate sequential fall in its consolidated net profit for the June quarter due to wage hikes and weak operating leverage, according to analysts. The top line is also likely to decline marginally due to the absence of seasonal revenues, which usually see a jump in the second half of the year. Healthcare players in the US, Sagility's primary customer base, continue to face profitability pressures given the regulatory changes and lower-than-expected reimbursements, brokerages said.

 

The business process management solutions provider's consolidated net profit for the June quarter is estimated to fall nearly 9% sequentially to INR 2.36 billion, according to the average of estimates from five brokerages. However, this implies a year-on-year growth of almost 59%. The highest bottom line estimate is INR 2.64 billion from Kotak Securities Ltd. and the lowest is INR 2.09 from ICICI Securities Ltd.

 

The company's consolidated revenue for the reporting quarter is likely to decline around 3% sequentially but rise almost 28% on year to INR 19.65 billion, as per the average of five estimates. The top line estimates range from INR 18.86 billion by Motilal Oswal Financial Services Ltd. to INR 20.67 billion by Elara Securities (India) Pvt. Ltd.

 

Sagility had reported a consolidated net profit of INR 2.58 billion for the March quarter on revenues of INR 20.24 billion. The company provides technology-enabled business process optimisation solutions to healthcare providers and health insurance firms, primarily in the US. Its services span claims management, clinical workflows, analytics, and revenue cycle management.

 

Brokerages primarily attributed the expected sales decline for the quarter to seasonal weakness. It is expected to be pronounced due to higher seasonality in the BroadPath business, JM Financial Institutional Securities Pvt. Ltd. said. "The provider segment is likely to remain steady. CareSeed would have negligible revenue contribution during the quarter," Kotak Securities said. Sagility acquired BroadPath Healthcare Solutions last year and CareSeed in June. Both are US-based companies.

 

The second half of the year is stronger in the US due to the open enrolment season, which is the annual window when individuals can sign up for, change, or cancel health insurance and other employee benefits. "We expect Sagility to deliver top-quartile performance among Healthcare BPO (business process outsourcing) peers," Motilal Oswal said.

 

Sagility's earnings before interest, tax, depreciation, and amortisation for the June quarter are expected to range between INR 4.23 billion and INR 4.69 billion, according to estimates from three brokerages. The company had reported an EBITDA of INR 5.04 billion for the March quarter and INR 3.69 billion for the year-ago quarter.

 

Kotak Securities estimates a sequential decline of 100 basis points in the company's adjusted EBITDA margin at 23.9% for the quarter. Elara Securities anticipates a 90 bps contraction. Analysts primarily attributed the expected margin contraction to the company-wide salary increments for employees, partially offset by the depreciation of the rupee against the dollar. Although the local currency appreciated 0.2% against the dollar by the end of the June quarter, it was weaker for a majority of the three months, hitting an all-time low of INR 96.96 on May 20.

 

Kotak Securities expects Sagility to retain its financial year 2026-27 (Apr-Mar) constant currency revenue growth guidance of 10-12% and adjusted EBITDA margin outlook at 24-25%.

 

Sagility will announce its June quarter results on Tuesday. Market participants await the management's commentary on cross-selling to top clients, the likely impact of artificial intelligence on revenues, productivity pass-back trends in large engagements, and the spending outlook tied to Medicare Advantage plans.

 

On Friday, shares of Sagility closed at INR 41.75 apiece on the National Stock Exchange, up 1.3% from Thursday. The stock is down a little over 3% since the company announced its March quarter earnings. The stock is also down nearly 28% from its 52-week high of INR 57.89 hit on Oct. 30.

 

All the five research reports on Sagility available with Informist have a "buy" or an equivalent recommendation on the stock with a target price of INR 55 per share, which is almost 32% higher than the current market price.

 

Following are the June quarter earnings estimates for Sagility from five brokerages, in descending order of net profit estimate, in INR billion:

 

Brokerage firm	Net sales	Net profit	EBITDA
Kotak Securities Ltd.	19.55	2.64	4.64
Elara Securities (India) Pvt. Ltd.	20.67	2.47
JM Financial Institutional Securities Pvt. Ltd.	19.49	2.43
Motilal Oswal Financial Services Ltd.	18.86	2.14	4.23
ICICI Securities Ltd.	19.69	2.09	4.69
Average	19.65	2.36	4.52

 

End

 

US$1 = INR 96.28

 

Edited by Avishek Dutta

 

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