Sagility’s margin rebounds as Q2 revenue growth reaches 22.53% YoY
Costs grew slower than revenue, but lower other income and a higher tax rate kept net profit growth below operating-profit growth.
Filed 22 Oct 2026, 18:37 IST · after market close · Sagility Ltd (SAGILITY)
Key takeaways
- Consolidated revenue grew 22.53% YoY, while operating margin expanded 0.18 percentage points to 25.21%.
- Operating margin recovered 2.89 percentage points QoQ as revenue grew 3.49% and expenses fell 0.36%.
- Sagility’s operating margin was 5.94 percentage points above the 19.27% median of 15 reported IT peers.
Price around the results
Q2 growth regained operating momentum
Sagility reported consolidated revenue growth of 22.53% YoY, with management attributing 11.9% constant-currency organic growth to expansion within national payers and the mid market. Operating profit grew 23.41% YoY, broadly keeping pace with revenue. QoQ, revenue rose 3.49% after the Q1FY27 decline in operating margin.
Lower costs lifted margin, while profit quality was mixed
QoQ expenses fell 0.36% even as revenue rose 3.49%, lifting operating margin by 2.89 percentage points. YoY, expenses grew 22.23%, slower than revenue growth, which supported a 0.18 percentage-point margin improvement. Profit before tax grew 14.51% YoY, below operating-profit growth, as other income fell 77.91%; other income contributed 3.43% of pre-tax profit, while the tax rate rose 0.8 percentage points.
Margin recovered after a two-quarter slide
Operating margin fell from 25.93% in Q3FY26 to 23.94% in Q4FY26 and 22.32% in Q1FY27 before recovering to 25.21% in Q2FY27. The current margin was 5.94 percentage points above the 19.27% median among 15 Information Technology peers that had reported. Lower interest expense also supported profit, declining 25.81% YoY and 15.3% QoQ.
Acquisitions and debt reduction remain management priorities
The presentation says Sagility acquired Chirok Health LLC to accelerate its provider segment and broaden its end-to-end revenue-cycle offering across CDI, coding, billing, denials, appeals and collections. Management said the CareSeed acquisition added 30 clients, including 26 new client groups. The company said debt will be fully repaid in the current financial year and that Open Enrolment and AEP would bring seasonal revenue in Q3 and Q4.
Market reaction is still pending
The results were filed after market close, so there is no post-results stock move to assess yet. Across the eight prior result reactions, the stock rose five times and fell three times, with a median absolute move of 5.00%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,032 cr | ₹1,963 cr | +3.49% | +22.53% |
| Other income | ₹13 cr | ₹-1 cr | — | -77.91% |
| Expenses | ₹1,520 cr | ₹1,525 cr | -0.36% | +22.23% |
| Operating profit | ₹512 cr | ₹438 cr | +16.92% | +23.41% |
| Operating margin (%) | 25.21% | 22.32% | — | — |
| Interest | ₹19 cr | ₹22 cr | -15.30% | -25.81% |
| Depreciation | ₹132 cr | ₹128 cr | +3.41% | +8.96% |
| Profit before tax | ₹374 cr | ₹287 cr | +30.17% | +14.51% |
| Tax | ₹90 cr | ₹71 cr | +27.37% | +18.47% |
| Net profit | ₹284 cr | ₹217 cr | +31.09% | +13.31% |
| EPS (₹) | ₹0.61 | ₹0.46 | +32.61% | +15.09% |
Operating margin of 25.21% compares with a Information Technology sector median of 19.27% across 15 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.67% | -2.28% |
Volume on the results session was 18.38× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q2 FY27 constant-currency organic growth was 11.9%, driven by expansion within national payers and the mid market.
Guidance & outlook
- The company says debt will be fully repaid in the current financial year.
- The company expects seasonal revenues from Open Enrolment and AEP in Q3 and Q4.
Expansion
- Sagility acquired Chirok Health LLC to accelerate its provider segment and expand its end-to-end RCM offering.
- The CareSeed acquisition added 30 clients, including 26 new client groups and two affiliates of existing client groups.
New initiatives
- Chirok enables a broader end-to-end provider revenue offering combining CDI, coding, billing, denials, appeals and collections.
What to watch
- Whether operating margin holds above 25.21% after the 2.89 percentage-point QoQ recovery.
- Whether constant-currency organic growth remains close to the 11.9% reported for Q2FY27.
- Progress toward management’s stated debt repayment plan, alongside interest expense below Rs 18.54 cr.