Sagility slips 5% post Q3 results; analysts retain 'buy', check target

Sagility's profit after tax (PAT) grew 23 per cent year-on-year to ₹322.9 crore in Q3FY26 compared to ₹262.6 crore in the year-ago period

Sagility share price today: Amid a subdued market, shares of healthcare business process management firm Sagility fell over 5 per cent to an intraday low of ₹49.1 on the National Stock Exchange (NSE), despite the company reporting better-than-expected results for the October–December quarter of fiscal 2026 (Q3FY26).

 

Around 01:00 PM, the Sagility's share price was trading 3.5 per cent lower at ₹49.92 compared to the previous session's close of ₹51.70 on the NSE. In comparison, the NSE Nifty50 was marginally down by 0.07 per cent at 25,325 levels. The market capitalisation of the company stood at ₹23,378 crore. The stock has fallen around 15 per cent from the 52-week high of ₹57.89 touched on October 30, 2025.  READ STOCK MARKET UPDATES TODAY LIVE

Sagilty Q3 results

In the Q3FY26, Sagility's profit after tax (PAT) grew 23 per cent year-on-year (Y-o-Y) to ₹322.9 crore compared to ₹262.6 crore in the year-ago period. 

 

The company's revenue from operations came in at ₹1,971.2 crore in the December quarter, up 35.7 from ₹1,453.1 crore in the year-ago period.  Earnings before interest, tax, depreciation and amortisation (Ebitda) grew 24.2 per cent to ₹512.5 crore against ₹412.7 crore in the year-ago period. 

 

Additionally, the company stated that organic growth remained healthy at 19.9 per cent Y-o-Y in Q3, driven by continued expansion within existing clients and an increasing contribution from new clients acquired in FY26. 

 

Sagility onboarded three new clients in the December quarter and a total of 12 in the nine-month period ended December 31, 2026. The total active clients stand at 81. 

 

The company management indicated that Sagility’s growth strategy is centred on expanding white-space opportunities, outcome-based managed services, and technology-led transformation, while also selectively adding high-quality new logos. The company’s shift toward outcome-based engagements helps de-link revenue from transaction or headcount-based pricing, improving margin resilience.

 

It raised the FY26 constant-currency revenue guidance to 22.5 per cent, including 13.8 per cent organic growth, while maintaining adjusted Ebitda margin guidance at 25 per cent.  ALSO READ | State Bank of India, HDFC Bk, ICICI Bk shares have more upside, finds study

Motilal Oswal Financial Services (MOFSL) on Sagility

According to Motilal Oswal Financial Services (MOFSL), Sagility delivered healthy growth in Q3, posting 29.1 per cent Y-o-Y constant-currency (CC) growth, driven by continued expansion within existing clients and a rising contribution from new clients added in FY26. Management expects this momentum to continue into Q4FY26, supported by second-half seasonality.

 

While the outlook is encouraging, MOFSL noted that revenue conversion from strong deal wins and cross-sell opportunities over recent quarters could have been better. The brokerage has built in around 7 per cent Q-o-Q CC growth for Q4FY26 and about 22 per cent Y-o-Y CC growth for FY26, with a stronger exit expected to set the base for FY27.

 

On margins, MOFSL highlighted that the Ebitda margin of 25.9 per cent in Q3 was within the guided range. The focus on outcome-based engagements helps improve margin resilience by reducing dependence on transaction- or headcount-linked pricing. However, given ongoing pricing and cost pressures faced by US health insurers, the brokerage does not expect meaningful margin expansion in the near term and models Ebitda margins in the 24–25 per cent range over FY26–28.

 

The brokerage has raised its earnings estimates to factor in the upgraded revenue growth guidance and the potential for higher outsourcing by US health insurance companies, supported by likely government healthcare spending cuts in CY27. Analysts expect new client additions, cross-selling opportunities, and synergies from Broadpath to drive revenue, Ebit, and PAT CAGR of 21 per cent, 30 per cent, and 24 per cent, respectively, over FY25–28. 

 

MOFSL has maintained its 'Buy' rating on the stock with a target price of ₹66, based on 22x FY28E EPS.  Disclaimer: The views or investment tips expressed by the brokerage in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.