Sagility India: Angel One sees 29% upside on AI-led growth, client wins

Sagility India Ltd reported consolidated revenue of Rs 1,539 crore (~$180 million) for the first quarter of FY26, up 25.8 per cent year-on-year (YoY). Adjusted EBITDA stood at Rs 369 crore, reflecting a 24 per cent margin and growth of 26.5 per cent YoY, while adjusted PAT came in at Rs 200 crore, a 13 per cent margin and up 38 per cent YoY. The company also maintained a strong cash conversion at 90 per cent, Angel One noted.

As per the brokerage, Sagility ended the quarter with cash reserves of Rs 454 crore and reduced borrowings to Rs 690 crore. Goodwill and intangibles from acquisitions were valued at approximately Rs 8,031 crore. The top three clients contributed 64.7 per cent of total revenues during the quarter.

During Q1 FY26, the company onboarded four new clients -- a $12 billion regional Blues plan, a $5 billion specialty health system, a pharmacy benefit manager (PBM) and a technology third-party administrator (TPA) firm -- while expanding business with 18 existing clients and sustaining long-term partnerships of 10–25 years. Angel One highlighted that Sagility secured $32 million (potential steady-state ACV) in new business and expansion in the quarter.

The brokerage further pointed out Sagility's investments in artificial intelligence (AI) and automation, with 18 live AI use cases such as Nurse Assist, Appeals Assist and Contract Validation, along with more than 15 in development. The company has expanded capabilities through the acquisitions of BroadPath, BirchAI and DCI.

Angel One said management has guided for low-to-mid teens organic revenue growth, and with the BroadPath acquisition factored in, expects to deliver over 20 per cent revenue growth in FY26 while sustaining EBITDA margins at 24 per cent.

The brokerage has assigned a 'BUY' rating on Sagility India with a target price of Rs 60 per share, implying a potential upside of 29.09 per cent from Thursday's closing price of Rs 46.48 on BSE.

It cited Sagility's healthcare domain expertise, long-standing client relationships, rising profitability, strong cash generation and AI-led transformation strategy as drivers of sustained growth and shareholder value creation.

Angel One cautioned that key risks for the company include high client concentration, US healthcare regulatory changes, elevated attrition, currency fluctuations and a goodwill-heavy balance sheet resulting from acquisitions.