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Informist, Tuesday, Jul. 21, 2026

 

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--Sagility: Q1 revenues down sequentially due to seasonality 
--CONTEXT: Sagility management's comments in post-earnigns analyst concall 
--Sagility: Retain FY27 sales growth guidance of low double digits 
--Sagility: Have started seeing growth with clients acquired in FY26 
--Sagility: Did not exercise any pricing levers in Q1 
--Sagility: Do not see execution scale up as a challenge for co 
--Sagility: Full impact of minimum wage hike in Karnataka will be seen in Q2 
--Sagility: Full-qtr impact of higher wages in Karnataka to affect Q2 margin 
--Sagility: Bullish about cross-selling opportunity with CareSeed acqusition
 

 

By Shakshi Jain and Ashutosh Pati 

 

NEW DELHI/ MUMBAI – Higher minimum wages in Karnataka and Telangana, which are expected to have an incremental impact of 120 basis points on Sagility Ltd.'s margins in the current financial year, have not shaken the company's adjusted margin guidance for the year. The company reiterated the earlier-stated adjusted earnings before interest, tax, depreciation, and amortisation margin guidance of 24-25% for 2026-27 (Apr-Mar) in a post-earnings conference call with analysts Tuesday. "If the eventual outcome on minimum wages results in a lower impact, we could be at the upper end of that range or even higher," a top company executive said.

 

Another executive explained that operational efficiencies and benefits from depreciation of the rupee against the dollar are expected to help offset this incremental impact. Both the Karnataka and Telangana state governments notified comprehensive minimum wage revisions in the June quarter.

 

The full-quarter impact of the wage hikes in Karnataka will be visible in the ongoing quarter, the management said.

 

Sagility also remains confident in its revenue growth outlook and reiterated the guidance of low double-digit organic growth in constant currency terms for the year. 

 

For the June quarter, Sagility reported a consolidated net profit of INR 2.17 billion, down almost 16% sequentially. Its revenue for the quarter declined 3% sequentially to INR 19.63 billion. The company management blamed seasonality for the weak top-line growth during the quarter. "... Revenue strengthens in the second half of the year and then normalises in Q1 as open enrollment volumes taper off," it said.

 

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. Sagility provides technology-enabled business process optimisation solutions to healthcare providers and health insurance firms, primarily based in the US. 

 

The management also clarified that no pricing levers were exercised during the June quarter to help the top line. "Given the situation of our clients, the movement in prices is in the opposite direction. There's more pricing pressure than price increases that we would get. So there is no revenue growth because of price increases," it said.

 

Sagility completed the CareSeed acquisition in the June quarter, adding 26 new clients through the exercise. The company has added a "significant number of mid-market and small clients" through the recent acquisitions of BroadPath Healthcare Solutions and CareSeed, which has turned the company bullish on cross-selling opportunities ahead, the management said. "We have six or seven opportunities and active conversations in the pipeline on BroadPath clients as we speak."

 

Overall, the company has also started seeing growth with clients acquired in FY26 and does not see execution scale-up as a challenge, according to the management. 

 

Tuesday, the company's shares ended at INR 41.84 on the National Stock Exchange, up 1.3% from the previous close. Sagility detailed its June quarter earnings after market hours.  End

 

Edited by Saji George Titus

 

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