At a Glance

Sagility India, the Bangalore-based healthcare outsourcing player formerly known as Berkmeer India, just dropped its Q1 FY26 results and the numbers are—surprisingly—healthy. Revenue jumped 25.8% YoY to ₹1,538.9 crore, while adjusted PAT climbed a juicy 38% YoY to ₹149 crore. But hold on to your stethoscopes: promoter holding tanked from 82% to 67% in just one quarter. That’s like watching your diet plan collapse during Diwali. With a P/E of 29.8, ROE of 7.3%, and zero dividends, investors are left wondering—are we getting healthcare or heartache?

Introduction

Healthcare outsourcing sounds fancy, but here’s the kicker: it’s basically India doing the U.S. healthcare system’s homework—because they’re too expensive to do it themselves. Sagility India has carved out a neat slice (1.23%) of this juicy pie. The company’s business is all about reducing costs for U.S. insurance companies (payers) and hospitals (providers) while charging them a fee. Think of it as a corporate middleman with a stethoscope.

The firm has been on a growth treadmill: sales are climbing, profits are slimming (in a good way), and debt is melting like butter on a dosa. Yet, there’s drama—promoter stake cuts, no dividends, and a stock that has fallen 2% while announcing great results. Investors are torn between clapping for the growth and crying over the governance red flag.

Business Model (WTF Do They Even Do?)

Sagility India operates in the healthcare outsourcing niche—fancy words for “we handle U.S. hospitals’ paperwork so doctors can keep overcharging patients.” Their bread and butter is Revenue Cycle Management (RCM): verifying insurance, billing, and chasing unpaid claims. For payers (insurers), they offer claims processing, fraud detection, and cost containment.

Why does it work? Because the U.S. healthcare system is so complicated, even doctors need accountants. Sagility steps in, automates the mess, and saves clients money. In return, they bag long-term contracts and recurring revenues. With clients entirely in the U.S., they’re basically riding the American healthcare drama—minus the lawsuits.

Financials Overview

The FY25 numbers were a showstopper. Revenue surged 17% to ₹5,570 crore, while PAT leapt 136% to ₹539 crore. Operating margins stood firm at 23–24%. Q1 FY26 followed suit with ₹1,539 crore in revenue (25.8% YoY growth) and ₹149 crore PAT (38% YoY growth).

• OPM: 22% this quarter, showing operational efficiency.
• ROE: 7.3%—meh. Even your FD laughs at this.
• Debt: down to ₹1,402 crore from ₹4,788 crore in FY22. The CFO deserves a bonus.

The only party pooper? Zero dividends. Investors are just watching the company hoard cash like a squirrel in winter.

Valuation – The Crystal Ball Section

Let’s crunch some numbers (with sarcasm):

1. P/E Method:
   • EPS (TTM) = ₹1.42
   • Industry P/E ≈ 40
   • Fair Value = ₹1.42 × 40 = ₹56.8
2. EV/EBITDA:
   • EBITDA (TTM) ≈ ₹1,413 crore
   • EV/EBITDA industry ≈ 15
   • Fair Value = (15 × 1,413)/469 crore shares ≈ ₹45
3. DCF (Quick & Dirty):
   • Growth 15% for 5 years, discount 10%
   • Fair Value ≈ ₹50

🎯 Fair Value Range: ₹45–₹57 (Current price ₹42.4: slightly undervalued, if promoters stop playing hide-and-seek.)

What’s Cooking – News, Triggers, Drama

• Promoter Stake Sale: Dropped 15% in Q1. Investors smell a rat or maybe just a fundraise.
• New Auditor: PwC LLP onboard—maybe they’ll uncover skeletons or just polish the books.
• US Healthcare Trends: Rising outsourcing demand is a tailwind, but heavy reliance on one geography is a risk.
• Tech Integration: Investments in AI-driven RCM could boost margins.

Balance Sheet

Auditor’s Roast: Debt fell dramatically—good. But reserves danced from ₹4,288 Cr to ₹2,158 Cr in FY24, then back to ₹3,657 Cr. Accounting yoga?

Cash Flow – Sab Number Game Hai

Commentary: Operating cash is finally positive. Investing outflows scream expansion. Financing looks like they stopped begging banks.

Ratios – Sexy or Stressy?

Verdict: Ratios are getting sexier, but ROE is still shy.

P&L Breakdown – Show Me the Money

Commentary: PAT exploded 2.3× in FY25. Revenue scaling without margin dilution—a rare IT unicorn.

Peer Comparison

Comment: Sagility is cheaper on P/E but also less glamorous on returns.

Miscellaneous – Shareholding, Promoters

• Promoter Holding: Fell to 67.38% in Jun 2025 (from 82%).
• FIIs: Rising to 5.99%—foreigners smell opportunity.
• DIIs: Up to 14%—domestic institutions stepping in.
• Public: Doubled to 12.5%—retail herd enters.

Promoters: Used to be hoarders, now acting like escape artists. Classic suspense plot.

EduInvesting Verdict™

Sagility India is a paradox: strong financials, solid growth, and debt control, yet governance jitters (promoter stake drop) and low ROE keep it from being a slam dunk. The U.S.-only focus is both a moat and a risk. AI adoption and expanding contracts could drive margins higher, but investors must watch promoter actions like a hawk.

SWOT Analysis

• Strengths: High growth, strong U.S. client base, debt reduction.
• Weaknesses: Low ROE, no dividends, promoter stake drop.
• Opportunities: Rising healthcare outsourcing demand, tech integration.
• Threats: U.S. regulatory risks, client concentration, currency swings.

Final Word: Sagility is like that friend who aces exams but keeps changing colleges. Great potential, but drama never ends.

Written by EduInvesting Team | 30 July 2025
SEO Tags: Sagility India, Healthcare Outsourcing, IT Enabled Services