Sagility Revenue Jumps 22.5% to 20,321 Million Rupees in Second Quarter
Key Facts
Sagility on October 22 reported consolidated results for the second quarter of fiscal 2027, ended September 30, with revenue of 20,321 million rupees, up 22.5% year over year. Organic growth was 22.2%, but slowed to 12.2% on a constant-currency basis, or 11.9% for organic growth on the same measure. Adjusted earnings before interest, taxes, depreciation and amortization were 5,353 million rupees, up 23.0%, with a margin of 26.3%. Reported earnings on this measure were 5,252 million rupees, up 11.0%. Reported net profit was 2,842 million rupees, up 13.3%, while adjusted profit rose 8.1% to 3,254 million rupees.
The quarter-on-quarter comparison shows improvement in operating revenue and adjusted margin. Revenue increased from 19,635 million rupees in the first quarter to 20,321 million in the second quarter, while the adjusted earnings margin rose from 24.0% to 26.3%. The company said the second quarter did not include seasonal revenue from open enrollment or the AEP season, which is usually concentrated in the third and fourth quarters. Management described the second half as seasonally stronger, with disciplined execution through the AEP and open enrollment seasons as a priority. But the CEO said revenue from these seasons could be slightly lower than a year earlier, estimating on the earnings call that their contribution could decline by about 100 basis points, with the estimate potentially changing over the following weeks.
On costs, management said minimum-wage revisions in Karnataka and Telangana affected expenses. Their impact was 148 million rupees in the second quarter, compared with 70 million in the first quarter. In light of the quarter's results, Sagility raised its adjusted earnings margin guidance for fiscal 2027 to 25%-26%, from a previous range of 24%-25%. The guidance increase comes alongside annual revenue growth of 22.5%, compared with 8.1% growth in adjusted profit after tax. Revenue growth on a constant-currency basis, at 12.2%, was also below reported growth, while organic revenue growth on a constant-currency basis was 11.9%.
Growth varied across the company's two businesses: revenue from its payer business, which serves insurance companies, rose 24.4% to 18,262 million rupees. By contrast, revenue from its provider business, serving healthcare providers, increased 8.2% to 2,059 million rupees. The company attributed organic growth on a constant-currency basis of 11.9% to expansion with national health insurers and mid-market clients. It also said it secured contracts worth 40.2 million dollars in annual value during the quarter from 31 existing clients and one new client. Sagility acquired Chirok Health LLC to accelerate growth in its provider business, adding specialized capabilities in clinical documentation improvement and coding.
The company declared an interim dividend of 0.15 rupees per share, compared with 0.05 rupees in the previous interim dividend. It had 51,486 employees at the end of the quarter, up 16.5% year over year. In the market, a snapshot published at 11:47 on October 23 showed the stock at 44.77 rupees, down 0.62 rupees, or 1.37%, from the previous close. The company had announced its results the previous day and scheduled an investor meeting for October 22 at 7:30 p.m. India time to present its quarterly and first-half results. The CEO said the priority in the second half was "disciplined execution through the AEP and open enrollment seasons."