Can Sagility Become a Leading AI-Driven Healthcare Outsourcing Play? Here’s what Nomura says

Synopsis: Sagility Ltd has been rated “Buy” by Nomura, driven by 48% upside potential, supported by its AI-driven healthcare model, strong specialisation, high client retention, and exposure to US payers, with AI-led efficiencies boosting long-term growth.

The shares of a Small-Cap company, specialising in technology-enabled business process management (BPM) solutions exclusively for the U.S. healthcare industry, supporting both payers (insurers) and providers, are in focus after Nomura initiated a Buy with a target price of Rs. 55.

With a market capitalization of Rs. 18,697.23 crores in the day’s trade, the shares of Sagility Ltd rose by upto 7.4 percent, making a high of Rs. 40.26 per share compared to its previous closing price of Rs. 37.26 per share.

What Happened

Sagility Ltd, engaged in technology-enabled business process management (BPM) solutions exclusively for the U.S. healthcare industry, is in the spotlight today after brokerage firm Nomura initiated a “Buy” rating with a target price of Rs. 55, which implies an upside potential of 48% from the previous day’s closing price.

Reason for the Buy Target

• Shift Toward AI-Led, Outcome-Based Healthcare Models: The healthcare industry is moving from transactional outsourcing to AI-driven, outcome-based models. Sagility benefits due to its vertically integrated, tech-enabled approach, allowing it to deliver end-to-end solutions aligned with client needs for efficiency, measurable outcomes, and long-term cost optimisation, strengthening its competitive positioning.
• Advantages of Vertical Specialisation Over Horizontal Players: Clients are increasingly preferring vertical specialists over horizontal providers. Sagility’s deep healthcare focus gives it an advantage through a better understanding of regulations, workflows, and payer-provider dynamics, enabling more tailored, efficient, and compliant solutions compared to broader, less specialised competitors.
• Stable Due to High Complexity & Regulation: Engagement services, contributing around 30% of revenue, are expected to remain stable due to the complexity and regulatory nature of healthcare. Sagility’s experience and compliance expertise create high barriers to disruption, ensuring continued client reliance despite technological advancements.
• AI-Driven Efficiency Enhancements Without Margin Disruption: AI tools like Agent Assist and generative AI will significantly improve productivity and operational efficiency. However, most of these efficiency gains (estimated at 70–80%) are likely to be passed on to clients. 
• Revenue Concentration in US Healthcare Payers as a Growth Driver: Approximately 90% of Sagility’s revenue comes from US healthcare payers, which are large, complex organisations with significant outsourcing needs. This concentration provides exposure to a high-value, scalable market.
• High Retention Supporting Stability: Sagility’s client base includes 81 client groups with an average relationship of 18 years and a retention rate of 95%. This demonstrates strong trust, reliability, and deep integration into client operations.
• Strong Growth Projections Reflecting Business Momentum: Nomura projects Sagility to achieve revenue CAGR of 12% (USD terms) and EPS CAGR of 20% (INR terms) over FY26–28F. This indicates strong underlying business momentum, driven by AI adoption, client expansion, and operational efficiency gains.

Financials & Others

The company’s revenue rose by 35.65 percent from Rs. 1,453 crore in December 2024 to Rs. 1,971 crore in December 2025. Meanwhile, Net profit rose from Rs. 217 crore to Rs. 268 crore during the same period.

The company shows moderate profitability with an ROCE of 9.58% and ROE of 7.38%, indicating it generates decent returns but not very high. Its low debt-to-equity ratio of 0.14 reflects a strong and stable financial position with minimal reliance on borrowing. 

The PEG ratio of 0.07 is very low, which may suggest the stock is undervalued compared to its earnings growth. Overall, the company appears financially stable and potentially undervalued.

Sagility Ltd (formerly part of Hinduja Global Solutions’ healthcare business) is a healthcare-focused services and technology company that specialises in supporting payers, providers, and other healthcare organisations. The company delivers services such as revenue cycle management, clinical services, member engagement, and business process outsourcing, primarily for the U.S. healthcare market. 

Its core aim is to help healthcare clients improve operational efficiency, reduce costs, and enhance patient and member experiences through a combination of domain expertise and digital solutions. Sagility operates with a strong emphasis on healthcare-specific processes, combining automation, analytics, and AI-driven tools with deep industry knowledge.

It serves insurance companies, hospitals, and healthcare providers by managing complex administrative and clinical workflows, allowing clients to focus more on patient care. The company has a global delivery model, with operations and workforce spread across multiple locations, including India and the United States, enabling cost-effective and scalable service delivery.

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