Sagility raises FY27 adjusted EBITDA margin target to 25%–26%

Key Facts

Sagility raised its adjusted earnings before interest, taxes, depreciation and amortization margin guidance for FY27 to 25%–26%, from 24%–25% previously, according to its second-quarter investor presentation. The change followed a 26.3% margin in the quarter ended September 30, 2026, compared with 24% in the first quarter and 26.2% in the year-earlier period. Revenue was 20,321 million rupees, up 22.5% year over year in rupees and 12.2% in constant currency. Adjusted EBITDA rose 23% to 5,353 million rupees, while adjusted net profit increased 8.1% to 3,254 million rupees. The company approved its second-quarter and first-half results on October 22 and said the higher guidance reflects improved operating profitability during the quarter.

Management attributed the margin improvement to a combination of strong operating efficiency, a limited positive foreign-exchange impact and a favorable geographic mix. It said the efficiency gains seen during the quarter are expected to continue into the fiscal year. It also said the exchange-rate impact between the first and second quarters supported results, and is expected to remain at similar levels. This combination is reflected in the increase from a 24% margin in the first quarter to 26.3% in the second quarter, while the margin was 26.2% a year earlier. The higher guidance gives investors a higher benchmark for tracking margins in the second half, while the annual growth trajectory also remains tied to the company’s seasonal revenue outlook.

On revenue, Sagility recorded stronger growth in its payer business than in provider services. Payer revenue rose 24.4% year over year in the second quarter, compared with 8.2% growth in provider services. Providers accounted for 10.1% of revenue, down from 11.5% in the year-earlier quarter. The company is expanding this business through its acquisition of Chirok Health, which closed on October 21, 2026. Management said the deal adds specialized clinical documentation and coding capabilities and expands Sagility’s end-to-end revenue cycle management offering for providers.

First-half FY27 revenue was about 39,956 million rupees, up 25% year over year, or 13.7% in constant currency. Over the same period, the company generated operating cash flow of 6,343 million rupees and free cash flow of 5,176 million rupees. Its net debt position shifted from net debt of 1,962 million rupees at the end of FY26 to net cash of 1,127 million rupees in September 2026. These cash indicators reflect the first-half trajectory alongside revenue growth, while the new guidance does not change the company’s focus on sustaining organic growth. The comparison between the two segments remains important to understanding the business mix, as provider services remains smaller than the payer business based on the reported revenue share.

Sagility said second-quarter revenue did not include seasonal revenue from open enrollment, a period typically associated with revenue in the third and fourth quarters. The company nevertheless expects revenue from open enrollment and the annual enrollment season to be slightly lower than the previous year. It kept its FY27 organic revenue growth guidance at the low end of double digits in constant currency. This outlook places the coming season alongside the higher margin target, with the company indicating that it expects operating efficiency gains to continue. Regarding shareholder distributions, the board announced an interim cash dividend of 0.15 rupees per share, compared with 0.05 rupees in the previous interim dividend, payable no later than November 21, 2026.