Sagility Q1 FY27 Results (NSE: SAGILITY)
Signal: Margin expansion
The read
Q1FY27 delivered a strong revenue beat (+27.6% YoY, 15.2% CC), with adjusted EBITDA margin sustained at 24.0%. The reported QoQ revenue decline of 3.0% is fully explained by Q4 seasonality (OE/AEP contracts), and organic steady-state CC revenue grew a healthy 5.1% QoQ sequentially. The CareSeed acquisition (closed June 11, 2026) added 26 new clients and strengthens HEDIS/risk adjustment capabilities, positioning Sagility for Medicare Advantage growth. Adjusted PAT growth of 35.1% YoY comfortably outpaced revenue, reflecting operating leverage and lower finance costs. The one-time exceptional charge of ₹150.89 Mn from minimum wage restructuring is non-recurring. Key watch item: client addition quality beyond CareSeed (27 new clients, 26 from acquisition), but deal ACV of $35.3 Mn signals steady organic momentum.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,963.48 Cr | +27.6% (15.2% in constant currency) | -3.0% |
| EBIT | ₹302.57 Cr | +43.8% | |
| Net profit | ₹216.81 Cr | +45.9% | |
| EPS | ₹0.46 | +43.8% | |
| EBIT margin | 15.4% |
P&L walk
Revenue grew 27.6% YoY to ₹19,635 Mn, with reported QoQ decline of 3.0% attributed to Q4 OE/AEP seasonality; adjusted EBITDA margin of 24.0% was flat YoY, as employee cost efficiency (-160bps YoY as % of revenue) offset higher other expenses (+180bps YoY); adjusted PAT grew 35.1% YoY to ₹2,697 Mn, outpacing revenue growth due to operating leverage and lower finance costs; EPS of ₹0.46 rose 43.8% YoY, tracking PAT growth; an exceptional charge of ₹150.89 Mn from minimum wage restructuring weighed on reported PAT.
Segments
No segment information disclosed; the group operates as a single segment 'Business process management services' and CODM evaluates performance at the group level. The consolidated vs standalone revenue gap (₹14,245 Mn vs ₹5,390 Mn) indicates earnings are concentrated in the US-based subsidiaries (Sagility LLC etc.).
Key positives
- Revenue growth of 27.6% YoY (15.2% CC), with organic growth at 14.9% CC.
- Adjusted EBITDA margin sustained at 24.0%, flat YoY despite wage pressures.
- Adjusted PAT grew 35.1% YoY, outpacing revenue growth.
- CareSeed acquisition adds 26 new clients and differentiated HEDIS/quality analytics, expanding mid-market reach.
- Deal ACV of US$35.3 Mn indicates strong organic sales momentum.
- Employee cost as % of revenue improved 160bps YoY, showing operational leverage.
- Finance costs declined 20.1% YoY, supporting bottom-line growth.
Key concerns
- Reported revenue declined 3.0% QoQ due to Q4 seasonality, though ex-seasonal organic CC growth was +5.1% QoQ.
- Exceptional charge of ₹150.89 Mn from minimum wage restructuring weighed on reported PAT.
- Client additions heavily concentrated via acquisition (26 of 27 new clients from CareSeed); organic client wins appear modest.
- Other expenses as % of revenue rose 180bps YoY, partly offsetting employee cost efficiencies.
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