Sagility Ltd. Hits All-Time High After Strong Q2 Earnings and Raised FY26 Guidance

Sagility Ltd. saw its stock price climb over 12% to reach an unprecedented all-time high on Thursday, October 30. This surge followed the company's announcement of impressive second-quarter financial results after market closing on Wednesday. Management also communicated an upward revision to the fiscal year 2026 revenue growth and EBITDA margin guidance to CNBC-TV18.

Key financial highlights from the second quarter include a more than doubling of net profit to ₹251 crore, a 25.2% increase in revenue to ₹1,658 crore, and a 37.7% rise in EBITDA to ₹415 crore, accompanied by an expansion in EBITDA margins to 25% from 22.7% year-over-year.

Jefferies maintained its 'buy' rating and raised its price target to ₹62, noting that while Q2 revenue was in line, margins and profit exceeded expectations. The brokerage highlighted Sagility's strong growth outlook driven by healthy deal wins, consistent client additions, and synergies with Broadpath, raising EPS estimates and projecting a 20% EPS CAGR.

JM Financial also kept its 'buy' rating with a ₹66 price target, expressing optimism due to strong earnings visibility, high cash conversion, and an anticipated 27% EPS CAGR through FY28. They acknowledge a potential overhang from promoters selling some stake.

The company management has raised FY26 revenue growth guidance to over 21% (previously 20%) and EBITDA margin guidance to 25% (previously 24%). They anticipate the second half of the current fiscal year to be as strong as the first and are actively seeking suitable merger and acquisition opportunities. Furthermore, the company clarified that new H-1B visa regulations will not impact its US operations, as over 99% of its US employees are green card holders or residents.

Impact This news has a high positive impact on Sagility Ltd. and potentially the broader Indian IT services sector, signaling strong performance and optimistic outlook from a significant player. The stock's all-time high and positive analyst sentiment suggest increased investor confidence. Rating: 8/10.

Difficult Terms Explained: EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures a company's operating performance. CAGR: Compounded Annual Growth Rate. It represents the average annual growth rate over a period. EPS: Earnings Per Share. It indicates the company's profitability allocated to each outstanding share. Brokerage: A financial firm that facilitates the buying and selling of securities for clients. Price Target (PT): The future price level of a stock as predicted by financial analysts. Guidance: A company's forecast for its future financial performance.