Sagility India Limited

Sagility India Limited provide technology-enabled business solutions and services to clients in the U.S. healthcare industry. They are a pure-play healthcare focused services provider, and the clients include Payers (U.S. health insurance companies, which finance and reimburse the cost of health services) and Providers (primarily hospitals, physicians, and diagnostic and medical devices companies). Company's services to Payers cater to various aspects of their operations including (i) core benefits administration functions such as claims management, enrolment, benefits plan building, premium billing, credentialing, and provider data management and (ii) clinical functions such as utilization management, care management, and population health management. Our services to Providers include revenue cycle management functions such as financial clearance, medical coding, billing, and accounts receivable follow-up services. Additionally, they also provide some of the services that we provide to Payers to pharmacy benefit managers ('PBMs') that manage prescription drugs for Members (i.e., insured persons) under health insurance plans.  All of company's clients are located in the U.S. As of June 30, 2024, their five largest client groups had an average tenure of 17 years with the Business. As of January 2024, they served five of the top 10 Payers by enrolment in the U.S. Further, during the Financial Years 2024 and 2023 and the quarter ended June 30, 2024, they have added 22 new clients. In the Financial Year 2024, they helped the Payer clients process 105 million claims and handle over 75 million Member and Provider interactions. Company has a multi-shore service delivery model, whereby they provide the services from 31 locations in five countries (U.S., Colombia, Jamaica, India and the Philippines). As of June 30, 2024, they had 35,858 employees servicing Members across the U.S. In Financial Year 2024, They determine the location of service delivery in consultation with the clients, depending upon their requirements. As per financial performance, Sagility India Limited has posted total income / net profits of Rs 944.39 Cr / Rs (4.67) Cr (FY22), Rs 4,236.06 Cr / Rs 143.57 Cr (FY23), Rs 4,781.50 Cr / Rs 228.27 Cr (FY24) and Rs 1,247.76 Cr / Rs 22.29 Cr (Q1 FY25). So as per previous financials data, company has shown steady growth. Company has an average EPS of Rs 0.37 and average RoNW of 2.52% for last three fiscals. Issue is priced at a P/BV of 1.85 as per NAV of Rs 16.25/- as on 30.06.24. If we attribute latest earnings of FY23, FY24, TTM and annualised FY25 on equity post issue, then asking price is at a P/E of around 97.82, 61.52, 67.5 and 157.49 respectively. As per RHP, there is no listed peers. On BRLM's front, four lead managers are associated with this IPO, and have handled around 104 IPOs in last three fiscals. As per financials, Sagility India Limited has shown steady growth, RoNW is 3.54% and P/E is 97.82, 61.52, 67.5 and 157.49 respectively as per FY23, FY24, TTM and annualised FY25 earnings. So, issue looks fully priced. Company provides technology-enabled business solutions and services to clients in the U.S. healthcare industry, which is a very competitive business segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Sagility B.V.
• 2 Sagility Holdings B.V.