Techno-funda pick below Rs 50! Analysts see up to 55% upside in the stock; check targets

Sagility India has caught the attention of Geojit Investments and other brokerage firms due to its robust revenue outlook and potential breakout in stock performance. They beleive that the stock, which was listed in the fag end of 2024, may deliver up to 55 per cent returns.

Sagility's focus on non-discretionary spend, higher-margin offshore delivery, and a strong order pipeline are key to its forecasted growth, especially in a seasonally stronger second half of the year. Sagility trades at 24 times its forward P/E, a valuation considered attractive for its niche business model in the BPO sector, said Geojit.

The stock, trading around Rs 44-45, is consolidating near an upward breakout point and has formed a bullish candlestick pattern. This technical setup, along with the reclaiming of its 100-day moving average, suggests a positive momentum for further upward movement.

In the recent Q1FY26, Sagility reported a revenue increase of 26 per cent year-on-year to Rs.1,539 crore, while net profit soared by 577 per cent year-on-year to Rs.149 crore. This growth was bolstered by new contracts worth $32 million and the strategic acquisition of roadPath, which is expected to enhance cross-selling opportunities and support continued expansion.

Despite challenges from cuts in US Federal Medicaid funding, Sagility's limited exposure to these cuts mitigates risk. The management has increased its EBITDA margin guidance based on automation and cost controls. Furthermore, the management maintains its organic growth guidance in the low-to-mid-teens, with the overall growth projected above 20%.

Momentum indicators such as RSI and MACD support a positive stock outlook, with the possibility of a breakout from the resistance zone. Geojit Investment notes these indicators as reinforcing the potential for stock appreciation, opening a buy call range of Rs 43-44 with optimism for further gains.

Sagility India is a healthcare-focused, technology-enabled solutions provider, serving primarily US health insurers payers and, to a lesser extent, hospitals, physicians, and medical device companies. Bengaluru headquartered-player operates 33 centres across India, the US, and other global markets.

Sagility India continues to be among the top picks of JM Financial from IT services as space as margin performance was broadly in-line and Sagility did better than expected. It has a 'buy' rating with a target price of Rs 68, suggesting a 55 per cent upside from its previous close.

"Sagility’s cross-selling to Broadpath clients is also on track It maintained its FY26 growth and EBITDA margin guidance. We factor in 22.5 per cent FY26E revenue growth," said ICICI Securities, maintaining a 'buy' with a revised target of Rs 62, based on an unchanged one-year forward target P/E of 26 times.

Sagility India was listed at the bourses in November 2024, when the company launched its Rs 2,106.40 crore IPO, selling its shares for Rs 30 apeice. The issue was entirely an offer-for-sale (OFS) by the promoters of the company. The stock is currently 20 per cent down from its 52-week high at Rs 56.44, hit in December 2024.