Jefferies initiates coverage on Sagility India with 'buy' tag, sees 18% upside; shares surge 5%

Over the past year, Sagility shares have surged around 50 percent.

International brokerage Jefferies initiated coverage on Sagility India, a business process management (BPM) company, with a "Buy" rating and a target price of Rs 52 per share.

From the previous session's closing price of Rs 43.9, Jefferies' price target implies a potential upside of around 18 percent. As a result, shares of the firm jumped 5 percent in trade to the Rs 46.09 mark at 9.15 am.

Sagility is recognized for its deep domain expertise in the US healthcare sector, positioning it as a key player in this space, noted Jefferies. The brokerage expects Sagility to achieve robust growth over FY25 to FY27, projecting a CAGR of 12 percent in revenue and an impressive 40 percent in profit after tax.

"The firm's superior earnings growth outlook is anticipated to sustain its current PE multiples, highlighting the company's strong growth potential," added Jefferies.

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Jefferies highlights a few key factors driving Sagility’s growth. The company is well-positioned to sustain double-digit revenue growth, while the normalization of depreciation and amortization (D&A) costs, along with efforts to reduce debt, are expected to boost earnings per share (EPS).

With its sharp focus on the US healthcare BPM market and a clear strategy for growth, Sagility stands out as an attractive investment opportunity. Jefferies believes the company’s strong performance and financial improvements could help it maintain its valuation and appeal to investors over the next few years.

Over the past year, Sagility India shares have surged around 50 percent as compared to the Nifty 50, which has gained around 13 percent during the same time period.

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