Sagility (SAGILITY)

FairStock Score: 70/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Strong growth momentum: sales up 27.48%, profit up 94.53%, with latest quarter net profit of ₹268 Cr on sales of ₹1,971 Cr.
• Healthy balance sheet: debt/equity only 0.14, Piotroski F-Score 8/9, and Altman Z-Score 2.88.
• Promoter holding of 50.95% aligns management with shareholders.
• Positive free cash flow of ₹256 Cr supports fundamental operations.

Concerns

• Price ₹42.16 is above Graham Number ₹33.97 and DCF value ₹29.24, giving negative margin of safety of -16.43%.
• EV/EBITDA of 58.57 is very expensive despite the reasonable P/E of 21.19.
• Profit growth of 94.53% is unlikely to be sustainable, increasing the risk of multiple compression.
• Dividend yield of 0.13% offers negligible downside support.

AI Analysis

When I look at Sagility, I see a fast-growing IT-enabled services company, but my discipline as an investor is to never pay any price for growth. The headline numbers are exciting: sales grew 27.48%, profits jumped 94.53%, and the PEG ratio is 0.39. The balance sheet is not a concern: debt/equity is only 0.14, the Piotroski F-Score is a strong 8/9, and the Altman Z-Score of 2.88 suggests reasonable financial health. Free cash flow of ₹256 Cr shows the company does convert earnings into cash, and promoter holding of 50.95% is reassuring. But Graham taught me that valuation is the price that determines whether I am buying a bargain or a hope. At ₹42.16, with the Graham Number at ₹33.97 and DCF value at ₹29.24, I am buying with a negative margin of safety of 16.43% against Graham’s conservative benchmark. The P/E of 21.19 is not cheap, and the EV/EBITDA of 58.57 is extremely rich. A dividend yield of just 0.13% means I am not being paid to wait. ROE of 10.19% and ROCE of 9.58% are respectable but not extraordinary; this is not a dominant franchise with obvious pricing power. Profit growth of 94.53% is likely a spike, not a recurrence. If growth normalizes, the multiple can compress sharply, and the stock has already ranged wildly between ₹35.83 and ₹57.89 in a year. I will not chase this at today's price. I would rather wait for the price to fall closer to intrinsic value, while monitoring whether earnings and cash flow actually grow into the market cap. If the quality remains steady and the price offers margin of safety, this could become an interesting investment.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer