Current Rating and Its Significance
MarketsMOJO’s 'Strong Buy' rating for Sagility Ltd indicates a robust confidence in the stock’s potential for superior returns relative to its peers. This rating is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Investors should understand that this recommendation reflects the company’s present fundamentals and market conditions as of today, rather than solely the circumstances at the time of the rating update.
Quality Assessment
As of 25 December 2025, Sagility Ltd demonstrates strong operational quality. The company holds a 'good' quality grade, supported by a remarkable compound annual growth rate (CAGR) of 48.84% in operating profits over the long term. This sustained growth highlights efficient management and a resilient business model within the Computers - Software & Consulting sector. Additionally, the company has reported very positive financial results for the last four consecutive quarters, underscoring consistent operational strength.
Valuation Perspective
The valuation grade for Sagility Ltd is currently assessed as 'fair'. The stock trades at a price-to-book value of 2.7, which is reasonable given its growth trajectory and return on equity (ROE) of 9%. While not undervalued, the valuation reflects a balanced price relative to the company’s earnings and asset base. Investors should note that despite a modest year-to-date return of 3.51%, the company’s profits have surged by 136% over the past year, suggesting that the market may still be pricing in future growth potential.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend and Profitability
The financial trend for Sagility Ltd is rated as 'very positive'. The latest data shows operating cash flow for the year at ₹1,214.07 crores, the highest recorded, indicating strong cash generation capabilities. Operating profit to interest coverage ratio stands at an impressive 16.61 times, reflecting the company’s ability to comfortably service its debt obligations. Net profit for the most recent quarter reached ₹250.83 crores, growing at a rate of 50.8% compared to the previous four-quarter average. This robust profitability trend is a key driver behind the 'Strong Buy' rating.
Technical Outlook
From a technical standpoint, Sagility Ltd is currently in a bullish phase. The stock has delivered positive returns across multiple time frames: a 1-month gain of 5.64%, 3-month gain of 20.57%, and a 6-month gain of 25.98%. Even over the past year, the stock has appreciated by 6.79%. Despite a minor dip of 0.7% on the day of analysis, the overall technical momentum supports the positive fundamental outlook, signalling potential for further upside.
Institutional Confidence
Institutional investors hold a significant 20.47% stake in Sagility Ltd. This level of institutional ownership often reflects thorough due diligence and confidence in the company’s long-term prospects. Such investors typically possess greater resources and expertise to analyse company fundamentals, which can provide a stabilising influence on the stock price and enhance market credibility.
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- - Recently turned profitable
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What This Rating Means for Investors
For investors, the 'Strong Buy' rating on Sagility Ltd suggests that the stock is expected to outperform the broader market and sector peers over the medium to long term. The combination of strong quality metrics, positive financial trends, reasonable valuation, and bullish technical signals provides a compelling case for accumulation. However, investors should remain mindful of the company’s small-cap status, which can entail higher volatility and liquidity considerations.
Summary
In summary, Sagility Ltd’s current 'Strong Buy' rating by MarketsMOJO, updated on 09 Dec 2025, is supported by its excellent operational quality, very positive financial trends, fair valuation, and bullish technical outlook as of 25 December 2025. The company’s consistent profit growth, strong cash flows, and institutional backing further reinforce its investment appeal. This rating serves as a guide for investors seeking growth opportunities within the Computers - Software & Consulting sector, highlighting Sagility Ltd as a stock with promising fundamentals and market momentum.
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