Sagility India share price hits 5% upper circuit, soars over 30% in December so far; Jefferies, JPMorgan see more upside

Sagility India share price surged 5 per cent to hit the upper circuit limit of ₹48.91 in morning trade on BSE on Tuesday, December 24. With this, the stock has soared as much as 32 per cent in December so far. Sagility India share price opened at ₹47.90 on Tuesday against its previous close of ₹46.59 and soon jumped 5 per cent to the level of ₹48.91. This is also an all-time high for the stock which listed on November 12 this year.

Jefferies, JPMorgan see more upside in Sagility India stock

Global financial firm Jefferies on December 20 initiated coverage on the Sagility India stock with a buy recommendation, pegging the target price at ₹52, based on 31 times PE (price-to-earnings ratio).

Jefferies observed that Sagility is a leading healthcare-focused BPM (business process management) firm with deep domain expertise and end-to-end service offerings that position it well to gain market share.

The global financial firm expects Sagility's EBIT margins to nearly double over FY24-27 to 16.5 per cent due to the normalisation of D&A (depreciation and amortisation) costs, resulting in 31 per cent CAGR in EBIT over FY25-27. Furthermore, deleveraging of the balance sheet will lower interest costs over FY25-27, which in turn will spur earnings growth further to 40 per cent CAGR over FY25-27 — the highest amongst its peer set, said Jefferies.

"Over FY25-27, we expect Sagility to deliver a 12 per cent and 40 per cent CAGR in revenue and PAT, respectively, led by normalization of D&A costs and deleveraging. Superior earnings growth outlook is likely to sustain current PE multiples in our view," said Jefferies.

Similarly, JPMorgan also expressed its bullish views on the stock.

As widely reported by media, JPMorgan initiated coverage on the stock with an "overweight" view, with a target price of ₹54. JPMorgan noted a secular tailwind for the stock from increasing outsourcing in the US healthcare industry.

According to media reports, JPMorgan sees a 50 per cent earnings CAGR over FY24-27 for Sagility.

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