SAGILITY - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 2.9

📊 Core Financials Overview

Profitability

ROE at 2.88% and ROCE at 4.37% are very weak, indicating poor capital efficiency.

EPS of ₹0.77 is low relative to the stock price, suggesting stretched valuation.

Growth

PAT surged from ₹81.8 Cr to ₹96.7 Cr QoQ, a 1,409% quarterly profit variation, likely due to a low base or one-off gains.

PEG ratio of 0.20 implies some growth potential, but sustainability is questionable.

Balance Sheet Strength

Debt-to-equity ratio of 0.10 is excellent, showing conservative financial management.

No dividend yield, which may disappoint income-focused investors.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 60.1 Extremely high vs industry PE of 32.2 — overvalued

P/B Ratio ~2.14 Reasonable, but not cheap

PEG Ratio 0.20 Attractive if growth sustains

Intrinsic Value ~₹35–₹40 Estimated below current price

The valuation is not justified by current earnings or return metrics.

🏢 Business Model & Competitive Edge

Sector: Sagility operates in the healthcare BPO space, offering process outsourcing and digital transformation services.

Strengths

Low debt

Institutional interest rising (FII +2.6%, DII +6.6%)

Weaknesses

Poor return ratios

No dividend

High valuation despite low profitability

Unless the company delivers consistent earnings growth, its fundamentals remain fragile.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹38–₹42

Near 200 DMA (₹41.8) and below current price

RSI at 60.2 suggests mild bullish momentum

MACD positive but flat, indicating consolidation

🧭 Long-Term Holding Guidance

Avoid Fresh Entry at Current Levels: Valuation is too rich for the fundamentals.

Hold Only if Speculative: Momentum and volume are strong, but not backed by earnings quality.

Watchlist Triggers

Sustained EPS growth

ROE/ROCE improvement

Institutional accumulation

Sagility may offer short-term trading opportunities, but long-term investors should wait for clearer signs of operational strength.

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