Sagility (SAGILITY IN) – Q2FY27 Result Update – Strong execution, seasonality to impact organic growth – BUY

Sagility delivered a strong margin performance in Q2FY27, with adj. EBITDA margin of 26.3%, beating our est. of 24.7%, largely driven by operational efficiencies and FX tailwinds. Revenue growth of 12.2% YoY CC (11.9% organic) was below our estimate but remained steady, driven by expansion within national payers and mid-market clients, partly offset by weakness in the provider segment due to tapering of certain projects. Deal wins remained healthy, with ACV rising 18.2% YoY to US$40.2mn across existing and new clients. AI traction continues to improve, with new SOW wins and more solutions entering production, alongside a gradual shift towards end-to-end agentic workflows. On the strategic front, CareSeed is now fully integrated while Chirok Health acquisition (US$13mn TTM revenue & 35.8% adj. EBITDA margin) strengthens its mid-revenue cycle capabilities creating cross-selling opportunities and supporting diversification beyond its payer-led business. Management indicated that AEP and open-enrolment rev. is expected to be 100bps lower in FY27E but retained its low-double-digit organic growth outlook. Accordingly, we reduce our FY27E organic rev. growth est. to 10.8% from 11.8%. With CareSeed integration completed and Chirok expected to contribute ~US$5–6mn in FY27E, we revise blended rev. growth est. to 12.0% for FY27E (12.4% earlier) and 12.5% for FY28E (13.1% earlier), while maintaining 12.1% growth for FY29E. Following the strong margin beat, management raised FY27 adj. EBITDA margin guidance to 25–26% (24–25% earlier); accordingly, we increase our FY27E/FY28E/FY29E adj. EBITDA margin est. to 25.4%/25.6%/25.7%, respectively. Following the changes our EPS est. for FY28E & FY29E is upgraded by 3.3% & 2.9% respectively. We continue to value the stock at 18x Sept. 28E EPS and maintain our TP at INR 60. Maintain BUY.