Sagility India Hits 5% Upper Circuit After Strong Q3 Results and BroadPath Acquisition

Sagility India Ltd.’s shares hit the 5% upper circuit after reporting strong Q3 results, with revenue rising 15.3% YoY to ₹1,453 crore and net profit surging 207% to ₹217 crore. The company’s EBITDA margin expanded to 31.4%, driven by operational efficiencies and seasonal tailwinds. Additionally, the acquisition of BroadPath Healthcare Solutions strengthens its market position, enhancing client base and efficiency.

CONTENTS:

• Sagility India Hits 5% Upper Circuit After Strong Q3 Results and BroadPath Acquisition
• Sagility India Reports Strong Q3 Performance with 15.31% YoY Growth in Net Sales

Sagility India Hits 5% Upper Circuit After Strong Q3 Results and BroadPath Acquisition

Sagility India Hits 5% Upper Circuit After Strong Q3 Results and BroadPath Acquisition Sagility India Ltd.’s shares hit the 5% upper circuit on Thursday, February 6, following strong Q3 results. The healthtech services provider reported an 8.9% sequential increase in revenue in US Dollar terms, reaching $172 million, while revenue in rupee terms grew 9.7% to ₹1,453 crore.

The company’s constant currency growth stood at 9% quarter-over-quarter and 14% year-over-year. Net profit surged 85% from the previous quarter to ₹217 crore, with margins expanding by over 400 basis points to 27% from 22.7%.

Earnings per share (EPS) for the quarter was ₹0.46, reflecting a 181.4% YoY growth, while the adjusted EPS stood at ₹0.56, marking a 53.5% YoY increase.

Sagility also completed the acquisition of BroadPath Healthcare Solutions on January 29, 2025, gaining access to a large national payor and over 30 new mid-market payor clients. By the end of Q3, the company had 39,595 employees, with attrition improving to 21.8%. It maintained operations in five countries with 32 delivery centers.

For the nine-month period, adjusted profit after tax (PAT) reached ₹570.9 crore ($68 million), up 34.5% YoY, representing 14.3% of revenue. Basic EPS for 9M stood at ₹0.78, a 124.6% YoY increase, while adjusted basic EPS rose 25.4% to ₹1.24. The company also reported an operating cash flow to EBITDA ratio of 94%.

All five analysts covering Sagility have a “buy” rating on the stock. The shares are currently trading at ₹52.73, close to their recent high of ₹56.4.

Sagility India Ltd.’s stock was locked in the 5% upper circuit at ₹52.63 per share on the BSE on Thursday, following the release of its Q3 FY25 results. As of 10:31 AM, the stock remained at the upper circuit, while the benchmark BSE Sensex was down 0.23%.

The company, which debuted on the stock exchanges on November 12, 2024, reported an adjusted net profit of ₹262.6 crore for the December quarter, marking a 67.6% year-on-year (YoY) increase from ₹156.7 crore in Q3 FY24.

Strong Revenue and Margin Expansion

Sagility India Hits 5% Upper Circuit After Strong Q3 Results and BroadPath Acquisition Sagility India’s revenue for the quarter stood at ₹1,453.1 crore, reflecting a 15.3% YoY growth from ₹1,260.2 crore. The increase was partially driven by open enrollment seasonality. The payer segment, which accounts for 89.3% of revenue, grew 13% YoY, while the provider segment surged by 38.6% YoY, marking its second consecutive quarter of accelerated growth due to increased outsourcing and a shortage of clinical staff.

EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) grew 67.3% YoY to ₹456.7 crore, up from ₹273 crore, with the adjusted EBITDA margin improving to 31.4%, a 593 basis points quarter-on-quarter (QoQ) expansion, driven by seasonal tailwinds and operational efficiencies.

On a QoQ basis, revenue rose from ₹1,325 crore, EBITDA from ₹337.8 crore, and adjusted net profit from ₹163.6 crore. The company attributed its strong performance to long-standing client relationships and recent additions over the past two years.

Technology and AI-Driven Growth

Sagility India Hits 5% Upper Circuit After Strong Q3 Results and BroadPath Acquisition Sagility India highlighted that its technology-driven services—leveraging automation, analytics, and generative AI—have played a key role in strengthening client relationships, positioning the company as a trusted advisory partner.

For the nine-month period ending December 31, 2024, the company reported revenue of ₹4,001.4 crore, up 15.3% YoY (13.9% in constant currency). Adjusted EBITDA rose 30.2% YoY to ₹1,110.4 crore, while adjusted profit after tax (PAT) increased 34.5% YoY to ₹570.9 crore from ₹424.5 crore.

Group CFO Sarvabhouman Srinivasan attributed the exceptional quarterly margins to favorable forex movements, increased operating margins due to open enrollment, and higher other income.

BroadPath Acquisition to Strengthen Market Position

On January 29, 2025, Sagility India completed the acquisition of BroadPath Healthcare Solutions, expanding its client base with a large national payor and 30+ mid-market payor clients. The acquisition is expected to enhance efficiency by scaling onshore operations, reducing administrative costs, and improving resource utilization.

BroadPath, an Arizona-based healthtech provider, specializes in remote workforce solutions through its Bhive platform, which gained traction during the COVID-19 pandemic. Analysts at ICICI Securities noted that the acquisition is EPS accretive, with funding coming entirely from internal accruals.

Market Outlook and Analyst Ratings

The US healthcare industry, a key market for Sagility, grew at a 3.2% CAGR from 2014 to 2023, reaching $201.1 billion in 2023, and is projected to grow at 5.2% CAGR, hitting $258.9 billion by 2028. This presents significant opportunities for specialized service providers like Sagility India.

ICICI Securities has raised its FY25 EPS estimate by 24%, factoring in two months of BroadPath’s revenue, and increased FY26-27 EPS estimates by 2-4% due to improved growth expectations. The brokerage has also raised the share price target to ₹57 (from ₹55) and maintained an “ADD” rating, citing strong execution, favorable US healthcare trends, and synergistic acquisitions, including DCI, Birch AI, and BroadPath.

As of February 7, 2025, Sagility India’s stock was trading at ₹54.48, up 3.32%, with a 52-week high of ₹56.44 and a low of ₹27.02.

Sagility India Reports Strong Q3 Performance with 15.31% YoY Growth in Net Sales

Sagility India has reported impressive consolidated quarterly financial results for December 2024, showcasing robust growth across key financial metrics.

• Net Sales: ₹1,453.07 crore, marking a 15.31% increase from ₹1,260.18 crore in December 2023.
• Quarterly Net Profit: ₹216.91 crore, reflecting a 207.25% surge compared to ₹70.60 crore in the same period last year.
• EBITDA: ₹436.18 crore, growing 64.06% from ₹265.87 crore in December 2023.
• Earnings Per Share (EPS): Increased to ₹0.46 from ₹0.16 in December 2023.

Stock Performance

Sagility India’s stock closed at ₹50.22 on February 4, 2025 (NSE), delivering 71.28% returns over the past six and twelve months.

Quarterly Financial Breakdown (in ₹ Crore)

Sagility India Hits 5% Upper Circuit After Strong Q3 Results and BroadPath Acquisition For the quarter ended December 2024, Sagility India reported net sales of ₹1,453.07 crore, an increase from ₹1,325.05 crore in the previous quarter and ₹1,260.18 crore in December 2023.

Employee costs stood at ₹862 crore, up from ₹812.43 crore in September 2024 and ₹798.28 crore in the same quarter last year. Depreciation expenses were ₹116.17 crore, compared to ₹126.36 crore in September 2024 and ₹175.55 crore in December 2023.

Other expenses for the quarter were ₹198.84 crore, a slight decline from ₹211.47 crore in the previous quarter but close to ₹201.72 crore in December 2023.

Profit before tax surged to ₹289.81 crore, significantly higher than ₹160.42 crore in September 2024 and ₹43.52 crore in December 2023. Net profit also saw a sharp rise to ₹216.91 crore, compared to ₹117.34 crore in the previous quarter and ₹70.60 crore a year ago.

Basic earnings per share (EPS) stood at ₹0.46, up from ₹0.25 in September 2024 and ₹0.16 in December 2023.

Key Takeaways: Sagility India Hits 5% Upper Circuit After Strong Q3 Results and BroadPath Acquisition

• The company has demonstrated strong revenue growth and improved profitability over the past year.
• A significant reduction in depreciation costs and interest expenses contributed to the improved bottom line.
• The company has outperformed in terms of stock returns, making it an attractive investment prospect.