Sagility Limited: Navigating Growth and AI Transformation in Q2 FY26

Sagility Limited, a key player in the healthcare BPO sector, has reported a strong financial performance for the second quarter and first half of fiscal year 2026. The company's consolidated revenue for Q2 FY26 reached ₹1,658.5 crore, marking a significant 25.2% year-on-year growth. This robust top-line expansion was complemented by an impressive surge in profitability, with Adjusted EBITDA growing by 25.6% to ₹435.2 crore, maintaining a healthy margin of 26.2%. The Adjusted Profit After Tax (PAT) saw an even more dramatic increase, soaring by 84.0% year-on-year to ₹301 crore. These figures underscore Sagility's operational efficiency and strategic focus, particularly in leveraging advanced technologies.

The strong momentum continued into the first half of FY26, with consolidated revenues totaling ₹3,197.4 crore, a 25.5% increase from the previous year. Adjusted EBITDA for H1 FY26 stood at ₹803.9 crore, up 26.0%, while Adjusted PAT reached ₹500.7 crore, reflecting a substantial 62.4% growth. Management attributed this performance to sustained traction across both the Payer and Provider segments, highlighting the depth of their expertise and ability to deliver at scale. Organic growth also played a significant role, registering 16.0% year-on-year in Q2 and 16.9% in H1, demonstrating the company's inherent growth capabilities.

Strategic Initiatives and AI Integration

Sagility's growth narrative is deeply intertwined with its strategic embrace of AI and GenAI. The company is actively deploying AI-driven solutions to enhance efficiency and create value for its clients. As of the reporting date, Sagility has successfully implemented 25 AI-based use cases across nine clients, with seven new use cases introduced in the last quarter alone. These initiatives range from AI-driven 'transform-in-place' solutions, which combine operations analytics, process engineering, AI/ML, and GenAI to deliver over 20% savings for large national payers, to GenAI-powered, cloud-based engagement solutions promising 25-40% savings across member, broker, and provider interactions. The company also highlighted a shared-services model with a technology partner aimed at revenue growth by enabling new services like provider payments and engagement.

Management emphasized that these AI-led transformations are not merely about cost reduction but also about elevating client engagement and expanding service offerings. While acknowledging that AI might lead to some revenue cannibalization on existing work, Sagility is strategically offsetting this by securing additional work and increasing the scope of engagements. The company is also investing in Agentic AI-powered learning platforms to upskill its workforce, ensuring its teams are future-ready and capable of leading through technological transformation.

Market Dynamics and Outlook

The broader U.S. healthcare landscape continues to present both challenges and opportunities. Rising costs, shrinking margins, and increasing regulatory complexity are accelerating the industry's shift towards digital transformation and operational efficiency, a trend Sagility is well-positioned to capitalize on. The company's strong client relationships and consulting-led approach enable it to secure a growing share of clients' transformational agendas.

Sagility's revenue split by vertical for Q2 FY26 shows a significant contribution from the Payer segment at 88.5%, with the Provider segment accounting for 11.5%. This diversified client base within the healthcare ecosystem provides a stable foundation for growth. The company's annualized attrition rate remained steady at 26.3%, consistent with the previous year's trend, indicating stable retention and a mature delivery model.

Looking ahead, Sagility has expressed confidence in its future performance, increasing its revenue guidance for FY26 to 21% plus in constant currency and Adjusted EBITDA guidance to close to 25%. The company anticipates a stronger second half, particularly Q3, driven by the annual enrollment period (AEP) and contributions from acquisitions like BroadPath. Furthermore, Sagility announced an interim dividend of ₹0.05 per share and reiterated its commitment to fully repaying its debt by FY27, demonstrating disciplined capital allocation and a focus on shareholder value. The management's proactive stance on AI integration and strategic client partnerships positions Sagility for sustained growth in a dynamic healthcare market.