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SAGILITY - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.9
| Stock Code | SAGILITY | Market Cap | 18,458 Cr. | Current Price | 39.5 ₹ | High / Low | 57.9 ₹ |
| Stock P/E | 48.2 | Book Value | 22.1 ₹ | Dividend Yield | 0.13 % | ROCE | 4.37 % |
| ROE | 2.88 % | Face Value | 10.0 ₹ | DMA 50 | 44.5 ₹ | DMA 200 | 45.7 ₹ |
| Chg in FII Hold | 4.66 % | Chg in DII Hold | 6.49 % | PAT Qtr | 93.4 Cr. | PAT Prev Qtr | 111 Cr. |
| RSI | 38.7 | MACD | -2.36 | Volume | 2,79,48,860 | Avg Vol 1Wk | 2,01,55,191 |
| Low price | 36.6 ₹ | High price | 57.9 ₹ | PEG Ratio | 0.16 | Debt to equity | 0.09 |
| 52w Index | 13.4 % | Qtr Profit Var | -15.2 % | EPS | 0.77 ₹ | Industry PE | 23.1 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT declined from ₹111 Cr. to ₹93.4 Cr. (-15.2%).
- Margins: ROE at 2.88% and ROCE at 4.37% → weak efficiency.
- Debt: Debt-to-equity ratio of 0.09 → very low leverage.
- Cash Flow: Stable but limited due to weak profitability.
- Return Metrics: EPS at ₹0.77, very low earnings power.
💹 Valuation Indicators
- P/E Ratio: 48.2 vs Industry PE of 23.1 → highly overvalued.
- P/B Ratio: Price ₹39.5 / Book Value ₹22.1 ≈ 1.79.
- PEG Ratio: 0.16 → suggests valuation is expensive relative to growth.
- Intrinsic Value: Current valuation stretched, limited margin of safety.
🏢 Business Model & Competitive Advantage
- Operates in IT-enabled services and outsourcing solutions.
- Competitive advantage lies in scale and global delivery capabilities.
- Weak profitability and low return ratios limit overall health.
- Institutional interest rising, but fundamentals remain soft.
📈 Entry Zone Recommendation
- Technicals: RSI at 38.7 (near oversold), MACD negative, price below 50DMA (44.5) and 200DMA (45.7).
- Entry Zone: Accumulation possible near ₹36–38 for speculative investors.
- Holding Guidance: Suitable only for high-risk investors; long-term holding requires earnings improvement.
✅ Positive
- Debt-to-equity ratio very low (0.09).
- FII holdings increased (+4.66%).
- DII holdings increased (+6.49%).
⚠️ Limitation
- Weak ROE (2.88%) and ROCE (4.37%).
- Quarterly PAT declined (-15.2%).
- High P/E (48.2) compared to industry average (23.1).
- Low dividend yield (0.13%).
📉 Company Negative News
- PAT dropped from ₹111 Cr. to ₹93.4 Cr.
- Stock corrected from ₹57.9 to ₹39.5.
- Technical indicators (MACD negative, RSI weak) show bearish sentiment.
📈 Company Positive News
- Strong institutional investor interest (FII +4.66%, DII +6.49%).
- Debt-free balance sheet with minimal leverage.
🌐 Industry
- IT-enabled services industry has long-term demand drivers.
- Industry PE at 23.1 indicates sector trades at lower valuations compared to SAGILITY.
- Global outsourcing trends support growth, but competition is intense.
🔎 Conclusion
- SAGILITY shows strong institutional interest but weak profitability and efficiency.
- Valuations are stretched, limiting near-term upside.
- Best considered for speculative investors with entry near ₹36–38; long-term holding requires significant earnings improvement.