This article first appeared on GuruFocus .
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Revenue:INR19,635 million (USD207.8 million), 27.6% year-on-year growth, 15.2% growth in constant currency.
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Organic Growth:27.3% in INR terms, 14.9% in constant currency, excluding CareSeed acquisition.
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Adjusted EBITDA:INR4,716 million (USD49.9 million), 27.9% year-on-year growth, margin of 24%.
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Adjusted PAT:INR2,697 million (USD28.6 million), 35.1% year-on-year growth, margin of 13.7%.
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Operating Cash Flow:INR3,161 million, EBITDA to cash conversion approximately 70%.
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DSO:Reduced to 80 days from 87 days in Q4 FY26.
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Employee Strength:47,307 at the end of Q1.
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Voluntary Attrition:Improved to 28.6% from 38.1% in Q4 FY26.
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Net Debt:Reduced to INR1,110 million, net debt to adjusted EBITDA at 0.06x.
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Cash and Cash Equivalents:INR9,674 million.
Release Date: July 21, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Sagility Ltd ( NSE:SAGILITY ) reported a strong start to FY27 with a 27.6% year-on-year revenue growth.
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The company achieved a 15.2% growth in constant currency, demonstrating robust performance.
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Adjusted EBITDA grew by 27.9% year-on-year, with a margin of 24%, indicating strong profitability.
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The acquisition of CareSeed has strengthened Sagility's capabilities in the healthcare value chain, adding 26 new clients.
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Sagility's AI-led orchestration platform, Sagility Synchrony, is gaining traction, enhancing operational efficiency and client outcomes.
Negative Points
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Sequential revenue declined due to the seasonal impact of open enrollment and AEP volumes.
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The company faced a significant impact from an increase in statutory minimum wages in Karnataka and Telangana, affecting margins.
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Voluntary attrition, although improved, remains high at 28.6%, which could impact operational stability.
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The company is experiencing pricing pressure from clients, limiting the ability to increase prices.
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There is uncertainty regarding the full impact of minimum wage revisions, which could affect future profitability.
Q & A Highlights
Q: What is the proportion of employees on statutory minimum wage in Karnataka and Telangana, and what impact would further increases in minimum wages in other states have on Sagility? A: Ramesh Gopalan, CEO, explained that the majority of their operations in India are centered in Karnataka and Telangana, with about 15% to 20% of employees in other states. The 120-basis point margin impact from minimum wage increases is significant, and while it cannot be easily mitigated within the year, they are focusing on operational efficiencies and expanding in other states to manage this impact over the next 12 to 18 months.
Q: What is driving the strong 5% sequential growth in underlying revenues in Q1, and why is the guidance for low double-digit growth despite this strong performance? A: Ramesh Gopalan, CEO, noted that the growth is broad-based across existing and new clients, particularly in high-value areas like clinical services. However, the 5% sequential growth may not continue every quarter. The company remains confident in achieving double-digit growth for the fiscal year and will provide more specific guidance after Q2.
Q: Can you break down the 15% growth into volume growth from existing clients and new clients added in FY26? A: Ramesh Gopalan, CEO, stated that the growth is broad-based across clients, with no specific pricing levers exercised. The company continues to see growth from existing clients and new clients added in FY26. Specific numbers were not available, but the growth is driven by both existing and new client engagements.
Q: What are the expectations for the open enrollment season in Q3 and Q4, and how will it impact seasonal revenue? A: Ramesh Gopalan, CEO, mentioned that the proportion of seasonal revenue to total revenue is expected to remain similar to last year. The specifics of seasonal revenues will be clearer by September, but the company anticipates similar levels of seasonal business as in FY26.
Q: How is Sagility planning to manage the impact of minimum wage increases on margins, and what are the expectations for margin performance? A: Ramesh Gopalan, CEO, explained that the full impact of minimum wage increases will be felt in Q2. The company is maintaining a margin guidance of 24% to 25%, with potential to be at the upper end if the impact of minimum wage increases is lower than expected. Operational efficiencies and favorable foreign exchange movements are expected to help manage the impact.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
