Synopsis
Sagility share price jumped 8% after Nomura initiated coverage with a buy rating and a target price of Rs 55. The brokerage sees Sagility benefiting from AI in healthcare. The company serves U.S. health insurance companies and hospitals. Institutional investors have increased their stakes. Sagility shares have seen a decline recently.
ETMarkets.comActions of Agility rose as much as 8% to touch its day high of Rs 40.22 on BSE on Wednesday after an international brokerage firm Nomura has initiated coverage on the stock with a buy call and a target price of Rs 55. The price implies an upside potential of 47.4% from current market levels.
Nomura says Sagility is expected to be one of the biggest beneficiaries of the transition to AI-driven healthcare transformation. As clients move from transactional engagements to outcomes-based models, consolidation increasingly favors vertical specialists over horizontal point solution providers. Customers seeking sustainable, multi-year cost savings need end-to-end operational capabilities, which vertical players are best positioned to provide. Sagility’s deep healthcare expertise strengthens its positioning in this evolving landscape.
Importantly, engagement services, which represent approximately 30% of revenue, are unlikely to experience significant disruption. This is due to regulatory constraints and the inherent complexity of healthcare processes. That said, AI is expected to significantly improve operational efficiency. Tools like Agent Assist, powered by generative AI and analytics, can streamline workflows and improve productivity. However, a large portion of these efficiency gains, estimated at between 70 and 80 percent, will likely be passed on to customers, which should keep margins broadly stable in the medium term.
Sagility is a purely technological solution health solutions and service provider, catering primarily to payers, which account for approximately 90% of its revenue from U.S. health insurance companies, and to providers, contributing the remaining 10% from hospitals. As of 3QFY26, the company served 81 customer groups, with an average customer relationship of 18 years and a strong retention rate of 95%. It operates a vertically integrated model supported by a distributed workforce, enabling operational flexibility, while its deep healthcare expertise enables it to deliver high-quality, efficient solutions to stakeholders.
Nomura expects Sagility to deliver healthy growth, with revenue (in dollar terms) and EPS (in INR terms) expected to achieve CAGRs of 12% and 20%, respectively, over FY26-28F. Key risks to this outlook include a slowdown in the U.S. healthcare payer industry, reduced outsourcing of operational work, potential disruption to existing business models, and the emergence of new competitors.
Interestingly, domestic institutional investors (DIIs) have steadily increased their stake in Sagility over the period. Their stake increased from 7.25% in December 2024 to 7.47% in March 2025, before experiencing a sharp increase to 14.07% in June 2025. The upward trend continued, with stakes gradually increasing to 14.87% in September 2025, then to 21.35% in December 2025.
Foreign institutional investors (FIIs), on the other hand, also saw a marked increase in their participation, albeit at a more gradual pace initially. Their holding increased from 3.77% in December 2024 to 3.38% in March 2025, followed by a notable rise to 5.98% in June 2025. Although there was a slight decline to 5.59% in September 2025, FII holdings jumped to 10.25% in December 2025.
Sagility’s stock price has had a rough start to the year through 2026, down 12% over the past month. The stock price has fallen 15% in the last six months and almost 30% since the start of the year.
(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)
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