Motilal Oswal initiates IKS, Sagility with 'Buy'; Indegene 'Neutral'

Domestic brokerage house Motilal Oswal Financial Services has initiated coverage on three key healthcare and life sciences outsourcing firms, Inventurus Knowledge Solutions (IKS), Sagility, and Indegene, at a time when the US healthcare ecosystem is grappling with rising costs, staffing shortages, and operational bottlenecks. 

 

These pressures are accelerating outsourcing across payers, providers, pharma, and biotech, creating a structurally expanding opportunity for Indian BPO and healthcare IT specialists, analysts said. 

 

The brokerage has assigned ‘Buy’ ratings to IKS and Sagility, and a ‘Neutral’ rating to Indegene on the back of divergent earnings trajectories and strategic positioning.  READ LATEST STOCK MARKET UPDATES TODAY LIVE

 

US healthcare spending fuels outsourcing demand

 

The US remains the world’s most lucrative outsourcing market, with healthcare spending touching nearly $5 trillion in CY24, accounting for 17-18 per cent of GDP. Expenditure has grown at a steady 5 per cent compound annual growth rate (CAGR) over CY14-23 and is projected to reach $6.1 trillion by CY28 at a 5.5 per cent CAGR, according to Motilal Oswal. This expansion is driven by the two pillars of the US healthcare system, which include care financing via government programmes such as Medicare, Medicaid, VHA and CHIP, and care delivery through hospitals, physicians, and outpatient networks.

 

As administrative complexity grows, healthcare organisations are increasingly turning to specialised outsourcing partners to manage revenue-cycle operations, clinical documentation, regulatory processes, member services, and analytics. These operating expenses form the total addressable market for BPO players, with the US healthcare BPO segment alone offering a TAM of about $200 billion for payer- and provider-focused companies like IKS and Sagility. For Indegene, the global life sciences market remains attractive, with operating expenses expected to rise from $156 billion in CY22 to $201 billion by CY26 (6.5 per cent CAGR).

Deep domain specialists gain edge

 

Sagility, IKS, and Indegene have emerged as key players in the healthcare and life sciences outsourcing value chain, leveraging high-specialisation models to capture steady demand, analysts noted. Motilal Oswal highlighted several structural tailwinds supporting growth, including an aging US population, rising chronic disease incidence, expanding insured pools, escalating medical costs, and persistent administrative inefficiencies - - all of which push payers, providers, and biopharma clients toward higher outsourcing.

 

India currently commands 40-45 per cent of global healthcare BPO delivery, supported by costs that are roughly 40 per cent lower than onshore operations and rising talent pools in Tier-2 cities such as Coimbatore, Indore, and Vizag. Key competitors include Cognizant, GeBBS, Omega, Vee Technologies, and IQVIA in pharma outsourcing, with Indegene, Tata Elxsi, WNS and others leading in life sciences KPO.  ALSO READ | Sharekhan upgrades Divi's Labs to 'Buy' on strong FY26-28 growth visibility

M&A accelerates the shift to AI-led platforms

 

A major industry transition is underway i.e. a pivot from pure labour arbitrage to AI-aligned, technology-led platforms. The brokerage noted that recent mergers and acquisitions (M&A) moves by these companies are reshaping their offerings around data, analytics, and generative AI.

 

IKS’s $200 million acquisition of AQuity Solutions marked an inflection point, expanding its reach from outpatient care into the acute-care segment and granting access to rich clinical datasets crucial for training proprietary GenAI tools. This elevates IKS from a revenue-cycle manager to an AI-driven “care enablement” platform capable of delivering measurable productivity improvements.

 

Sagility’s acquisition of BroadPath Healthcare Solutions strengthened its presence in the payer mid-market and enhanced capabilities in highly regulated domains like Medicare and Medicaid member acquisition. The transaction also brought in Bhive, BroadPath’s remote-workforce platform, bolstering Sagility’s ability to scale distributed operations and cross-sell automation and analytics solutions.

 

Indegene’s acquisition-led strategy, capped by the purchase of BioPharm, positions it to build a comprehensive digital commercialisation suite for global biopharma clients. BioPharm’s omnichannel and data-driven competencies feed directly into the company’s Cortex GenAI platform, enabling personalised, scalable, and measurable engagement across the commercial lifecycle.

Motilal Oswal’s ratings and valuation

 

IKS is projected to deliver a robust 32 per cent earnings per share (EPS) CAGR over FY25-28, outperforming most healthcare BPO peers. Citing sustained client mining and strong structural growth, Motilal Oswal analysts assigned a ‘Buy’ rating with a target price (TP) of 2,107, valuing the stock at 32x FY28E EPS and implying a 32 per cent upside.

 

Sagility’s 31 per cent EPS CAGR over FY25-28 also supports a ‘Buy’ rating, with a TP of 63, implying a 31 per cent upside and valuing the stock at 24x FY28E EPS.

 

Indegene, expected to grow EPS at 15 per cent over FY25-28, trails peers and therefore receives a ‘Neutral’ rating with a TP of 595, offering a 13 per cent upside potential at 23x FY28E EPS.  ALSO READ | Navin Fluorine zooms 87% so far in CY25; stock among BSE 500 top performers

Risks to the outlook

 

Key risks, analysts believe, include slower US/EU healthcare spending, policy changes, currency volatility, automation-driven pricing pressure, client consolidation, delays in pharma research and development (R&D) budgets, attrition, and technology obsolescence. 

That said, on the bourses around 11:30 AM, Sagility share price was trading 2.87 per cent higher at ₹49.78; Indegene at ₹530.35, up 0.2 per cent. IKS, bucking the trend, was down 0.24 per cent at ₹1,567.15. In comparison, BSE Sensex was trading 0.19 per cent higher at 84,548.30.   

Disclaimer: The stock target/outlook has been suggested by Motilal Oswal. Views expressed are their own.