The U.S. Healthcare Market - An Overview
Healthcare is a vital and an integral part of the U.S. economy, representing about 18.0% of the countrys nominal GDP in 2024, with total National Health Expenditure estimated to be ~US$5.26 Trillion. Between 2014 and 2024, healthcare expenditure grew at a compounded annual growth rate (CAGR) of 5.78%. During the COVID-19 pandemic in 2020, this spending spiked to 19.45% of the nominal GDP, amounting to ~US$4.15 Trillion. Furthermore, the Centers for Medicare & Medicaid Services (CMS) in the U.S. Department of Health and Human Services projects that healthcare expenditure will continue to rise at a CAGR of 5.91%, reaching US$6.62 Trillion by 2028.
In 2023, the United States emerged as the worlds highest spender on healthcare, with per capita expenditure reaching US$13,432 at current prices adjusted for purchasing power parity, according to the Organization for Economic Cooperation and Development (OECD). This figure far outpaced that of Switzerland, the next highest spending country, which spent US$9,688 per person. The contrast becomes even more pronounced when viewed alongside developing economies, such as India with a healthcare per capita expenditure of less than US$80 in 2022.
This stark disparity underscores the dominance of the U.S. healthcare market, a position it is expected to maintain in the coming years. Further, forecasts from the CMS project that U.S. healthcare spending per capita will continue to grow at a compounded annual rate of 5.23% between 2024 and 2028.
Growth-driven market outlook
The U.S. healthcare market is undergoing a profound transformation, fuelled by demographic shifts, clinical trends, technological advancements, and policy changes. A key driver is the ageing population, with Americans aged 65 and above expected to increase from ~57.8 Million in 2022 to ~71.2 Million by 2030, intensifying demand for elderly care and specialized services. Chronic diseases also play a major role, as six in ten U.S. adults live with conditions like diabetes or heart disease, increasing the need for ongoing treatment and medication.
Concurrently, the system is transitioning to value- based care, with CMS aiming to shift most Medicare and Medicaid beneficiaries into such models by 2030, emphasizing prevention, outcomes, and coordinated care. Rising consumer expectations for personalized and on-demand services are pushing payers and providers to invest in digital tools and 24/7 engagement. Nontraditional models like telehealth and home-based care have surged post-pandemic, with home health spending reaching US$147.8 Billion in 2023.
Besides, government initiatives, including the CMS Health Equity Framework and HHS Behavioural Health Roadmap, aim to improve access and reduce disparities. Meanwhile, broader insurance coverage has driven the uninsured rate down to 8.2% by early 2024, reflecting increased demand for low-cost alternatives to ensure insurance coverage amid escalating costs.
Digital adoption in healthcare
Digital adoption in healthcare continues to gain momentum, though progress remains uneven across the industry. As more service providers enter this space, meaningful differentiation now depends on the depth and impact of digital investments.
The key to this evolution is interoperability?the ability to integrate data seamlessly across platforms, which demands standardized systems, modular designs, and cross-industry collaboration to navigate privacy and integration challenges. Equally important is organizational readiness, as healthcare enterprises must be equipped both structurally and culturally to support digital and preventive care through real-time analytics and automation. Updating outdated systems like Electronic Health Records (EHRs) and Electronic Medical Records (EMRs) is critical to improving data access, patient experience, and enabling capabilities such as fraud detection and predictive insights.
Moreover, the success of digital transformation rests on the digital upskilling of the workforce. Training staff in relevant technologies enhances operational efficiency, streamlines service delivery, and supports better clinical decisions. As these transformative forces align, the U.S. healthcare system stands at a pivotal juncture, poised for innovation, yet navigating a complex landscape of operational and technological challenges.
Roadblocks along the way
Despite the strong market outlook for the sector, the U.S. healthcare industry faces several structural challenges. A significant talent shortage looms, with projections showing a gap of over 187,000 physicians and nearly 208,000 nurses by 2037, threatening care access and service quality. At the same time, net premium per member per month rose at 6.0% in 2023, worsening affordability, and care disparities. Added to this is growing friction between payers and providers over billing and authorizations, which disrupts care continuity and patient satisfaction.
Regulatory and economic pressures further complicate the landscape. The end of the Covid pandemic has triggered Medicaid redeterminations, reduced coverage and adding financial strain. Medicare Part D, covering prescription drugs, reforms have also increased cost burdens for payers. Economic uncertainty may limit public healthcare funding and lead patients to postpone non-urgent care. At the same time, rising cybersecurity risks, highlighted by breaches like the reported US$872 Million Change Healthcare incident, pose significant operational threats. These headwinds demand greater innovation, flexibility, and resilience across the industry.
The U.S. healthcare market by segments
The U.S. healthcare market is primarily structured around two key entities responsible for financing and delivering care: healthcare payers and healthcare providers.
Healthcare payers refer to organizations that finance or reimburse the cost of healthcare services for insured individuals through health insurance plans.
Healthcare providers include licensed individuals and institutions responsible for delivering medical care. This category encompasses doctors, hospitals, clinics, laboratories, and suppliers of durable medical equipment, all of whom play a role in the care delivery process.
Healthcare payer segment
In the U.S. healthcare system, payers can be broadly categorized based on the type of health plan they offer:
i. Public (government-funded)
ii. Commercial (privately funded)
Government or public plans
These plans are funded by federal and state governments and aim to provide healthcare coverage for specific segments of the population. The major subcategories include:
Medicaid
Childrens Health Insurance Program (CHIP)
Traditional Medicare
Medicare Advantage
Other government plans
Commercial plans
Commercial plans are funded and operated by private insurance companies. They serve individuals, families, and employer groups. Some are self-funded by employers, with Third Party Administrators (TPAs) handling administrative tasks. Many commercial plans also include dental and vision benefits. Key subcategories are:
Employer-Sponsored Plans
Health Insurance Exchange (HIX)
Medicare Supplement (Medigap) Plans
In addition to plan types, healthcare payers are also categorized based on their geographic reach:
i. National
ii. Regional
National carriers
These insurers operate across most U.S. states, offering a wide range of plans, including Medicare Advantage and commercial insurance. Prominent examples include UnitedHealthcare, Elevance Health, Centene Corporation, CVS Health, Cigna Healthcare, Humana, Health Care Service Corporation, Highmark, and Kaiser Permanente.
Regional carriers
These insurers serve specific states or regions, including names like UPMC Health Plan, CareSource, and L.A. Care. Many offer both government and commercial plans tailored to local needs. A notable subset of regional carriers is the Blue Cross Blue Shield Association (BCBSA) plans, which are independently operated by 33 local companies (as of 27th June 2025).
Both national and regional carriers typically offer a mix of government and commercial health plans, tailored to meet the needs of their respective markets.
Healthcare providers segment
The U.S. healthcare provider landscape is diverse, encompassing a wide range of organizations and professionals responsible for delivering medical care. These providers can be broadly classified into the following categories:
Hospitals and health systems
These facilities offer a full range of inpatient, outpatient, and specialized services. The U.S. has over 6,000 hospitals, including major names like the Cleveland Clinic and Johns Hopkins.
Physician groups and clinics
Comprising independent or group practices, these providers deliver outpatient primary and specialty care. As of May 2024, more than 133,000 physicians worked in office-based settings to provide physician services.
Other providers
This includes long-term care centres, home health agencies, dental clinics, labs, and DME suppliers like DaVita and Laboratory Corporation of America Holdings, offering essential supportive and diagnostic services.
Coordinated care and supporting entities
Many hospitals and physician groups form Accountable Care Organizations (ACOs) to deliver coordinated, value-based care focused on outcomes rather than service volume. Moreover, there are supporting entities like Pharmacy Benefit Managers (PBMs) that manage drug benefits, negotiate pricing, and ensure affordable medication access. Both ACOs and PBMs play key roles in improving care quality and efficiency.
U.S. healthcare operations spend
Healthcare operations spending in the U.S., grew at a compounded annual growth rate (CAGR) of approximately 4.3% between 2021 and 2024, reaching around US$211 Billion in 2024. This expenditure is projected to further increase at a CAGR of more than 5% and is anticipated to hit the range of US$253-263 Billion by 2028. The key drivers of this growth include the aging population, rising cases of chronic diseases, and various government initiatives aimed at enhancing healthcare delivery.
Breakdown of operations spend: Healthcare payers and providers
In 2024, healthcare payers accounted for an estimated 68.7% of the total operations spend, contributing to the range of US$142-M7 Billion out of the overall ~US$211 Billion, while healthcare providers contributed a smaller share of around 31.3%, or US$63-68 Billion.
Payer-related operations spending is projected to grow at a year-on-year rate of approximately 4.8%, hitting the range of US$149-154 Billion in 2025. The payer operations spending has outpaced its growth in the previous years, a trend expected to continue due to rising consumer expectations and the evolution of care models.
In contrast, provider-related operations spending is expected to grow at a higher year-on-year rate of approximately 7.6% between 2024 and 2025, reaching US$68-73 Billion in 2025, driven by the increasing demand for healthcare services and the growing complexity of administrative functions such as billing.
211
US$ Billion, Total healthcare operations expenditure by the U.S., 2024
142-147
US$ Billion, Payer-related healthcare operations expenditure by the U.S., 2024
63-68
US$ Billion, Provider-related healthcare operations expenditure by the U.S., 2024
U.S. Healthcare Operations Outsourcing Market Overview
The outsourcing penetration rates of the U.S. healthcare payer segment stand at a considerable 22.8-24.8% of the total healthcare expenditure by the segment in 2024. This metric is further expected to increase to 23-25% in 2025, indicating a rise in the outsourcing penetration rates of the segment going forward. Moreover, the segments outsourcing spend is projected to grow at a CAGR of 6-8% from 2024 to 2028. This growth can be attributed to increased focus on cost containment, which is driving greater outsourcing of operationally intensive functions to reduce fixed overhead.
In terms of the U.S. healthcare provider operations, the outsourcing penetration stood at 20.8-22.8% of the total healthcare operations spending in 2024 and is anticipated to lie in the range of 22.2-24.2% in 2025. Driven by administrative complexity and volume fluctuations, the segments outsourcing spending is further projected to clock a CAGR growth of 11-13%.
Across the U.S. healthcare landscape, staffing shortages are accelerating the move towards outsourcing. With clinical talent in short supply, providers are turning to external partners for support in areas like care management, allowing internal teams to focus more directly on patient outcomes. Simultaneously, regulatory changes, such as Medicaid redeterminations and evolving CMS mandates, are driving organizations to outsource administrative functions like eligibility checks and member engagement to remain compliant and manage costs effectively.
Besides, the transition to ICD-11, with its significantly expanded coding structure, has further increased the demand for skilled coders and advanced systems. To avoid billing errors and revenue loss, many healthcare entities are relying on outsourcing partners with the necessary expertise. Rising cybersecurity threats, underscored by hundreds of millions of breached records, have also made data security a top concern, prompting firms to seek vendors with strong compliance and protection frameworks.
Financial pressures are also reinforcing these trends, with providers outsourcing billing, claims, and revenue cycle management (RCM) to improve efficiency and redirect resources to core care delivery. As value-based care expands, theres growing demand for outsourced preventive services like remote monitoring and risk management. Regionally, adoption varies, with strong demand in tech-forward states like California, cost- sensitive growth in the Midwest, and increasing needs across the South and Northeast.
48.67
US$ Billion, Total outsourced expenditure on healthcare operations by the U.S., 2024
Sagility Overview
At Sagility, were committed to improving the U.S. healthcare system by delivering technology-enabled solutions that improve how care is accessed, managed, and paid for.
Through a combination of deep industry expertise, tech- enabled solutions, and a global delivery model, we can help our clients run more efficiently ? creating value for patients, providers, and shareholders alike.
As a pure-play healthcare-focused services provider, we work exclusively with clients across the healthcare spectrum, both payers (U.S. health insurance companies that finance and reimburse the cost of care) and providers (such as hospitals, physicians, and diagnostic and medical device companies).
We generated approximately Rs55.7 Billion in operations revenue in FY 2024-25 and achieved a year-on-year growth rate of 17.2%.
Payer Services
For Payers, we offer services spanning most of the value chain, including claims management, payment integrity, clinical management services, and provider network operations, helping reduce costs and enhance care experience.
Claims Management
At Sagility, we manage of claims adjudication across inpatient, outpatient, pharmacy, dental, and vision claims using automation and experienced staff. We utilize cognitive extraction tools to automate manual tasks and provide support for grievance and appeals, with AI-driven prioritization for urgent cases.
Payment Integrity
Our Company helps payers reduce overpayments by using machine learning (ML)-based data mining, predictive analytics, and our proprietary "Contract
Central platform to reprice claims as per state and contract rules. Services are offered both pre-pay and post-pay, and handled by certified coders, clinicians, and auditors.
Clinical Management
We deliver chronic and complex case management, utilization management, and population health services across commercial, Medicare, and Medicaid lines. Our intake-to-decision workflows, appeals processing, and AI-based decision-making engines ensure regulatory compliance and reduce provider effort. We support vulnerable populations through whole-person care models and provide predictive elder care via our Aging in Place platform, including a member portal and care manager workflow. We also offer a 24/7 nurse helpline and post-discharge coordination to reduce readmissions.
Provider Services for Payers
We assist with provider onboarding, credentialing, and maintaining directories through our Provider Forward platform.
In the process of delivering services to our payers, we also engage with members and providers.
Member Engagement
We engage members throughout their plan journey, handling onboarding, benefit queries, network info, billing, pre-authorizations, claim explanations, and program awareness. Our solutions use GenAI, Natural Language Processing (NLP) and Natural Language Understanding (NLU), interaction analytics, and realtime transcription to improve service and drive insights.
Provider Engagement
We manage provider queries on benefits, prior authorizations and claims, handle complaints and appeals, and recover overpayments. Our analytics platform ensures response quality through NLP checks on accuracy and compliance.
Provider Services
For our provider clients, we offer complete RCM support from scheduling and insurance verification to coding, billing, denial management, and collections. Back-end services include cash posting, credit balance resolution, and patient engagement. Our team includes coders, nurses, claims processors, and accounts receivables specialists. We use predictive analytics and proprietary workflows to ensure fast, accurate reimbursements and manage order-to-cash cycles for labs, radiology, and DME providers.
Delivering with Scale, Resilience, and Precision
At Sagility, our delivery model is built for scale, flexibility, and resilience. With operations spanning 33 world-class delivery centers across India, the Philippines, the U.S., Jamaica, and Colombia, we are well-positioned to serve the evolving needs of the U.S. healthcare ecosystem. Our multi-shore presence, combined with certified data protection and service standards, ensures continuity, compliance, and quality at every touchpoint.
Our workforce of 39,409 professionals (as at the end of March 2025) plays a pivotal role in managing high volumes over 78 Million interactions and 119 Million claims while consistently maintaining industry-leading SLA performance and a top-quartile NPS score of 53 in our annual CSAT survey.
At Sagility, we remain steadfast in our commitment to operational excellence, innovation, and client value. Our investments in automation and intelligent operations spanning Robotic Process Automation (RPA), advanced analytics, and intelligent content processing are transforming complex workflows and accelerating efficiencies across our ecosystem. These technology- led enhancements are strategically supported by disciplined cost optimization across our delivery network, reinforcing our ability to scale with agility while maintaining service excellence.
Our quality and compliance framework are built on globally recognized standards, including ISO 27001, SOC 1 and SOC 2, HIPAA, and NCQA. These benchmarks are deeply embedded into our operating model and customized to meet the unique needs of each service line ensuring the highest levels of security, reliability, and regulatory alignment.
Through our business excellence framework, we champion a culture of continuous improvement. Leveraging Lean, Six Sigma, Kaizen methodologies, and structured health assessments, we are systematically advancing delivery maturity and enhancing value realization for our clients. Our dedicated Business Excellence team plays a critical role in institutionalizing best practices, driving performance improvements, and eliminating inefficiencies. Their efforts directly contribute to our ability to deliver consistent, high- quality outcomes while building long-term value.
Together, these initiatives reflect our deep-rooted focus on delivering with precision, safeguarding client trust, and enabling scalable, intelligent transformation across the healthcare value chain.
Building a Future-Ready Workforce
At Sagility, our workforce is central to our ability to deliver high-impact, technology-enabled services to the U.S. healthcare ecosystem. As of the end of March 2025, our global employee base stands at 39,409 a net increase of 4,365 year-over-year. This growth reflects our strategic commitment to scaling operations aligned to evolving client needs and industry dynamics. Our attrition remained stable at 27.5% in FY25, compared to 27.2% in FY24.
We are proud to maintain a specialized clinical workforce of over 2,000 professionals, including nurses, certified coders, and other clinical specialists. These individuals play a critical role in supporting our payer and provider clients across functions such as utilization management, care coordination, medical coding, and clinical review. Their expertise enhances our ability to deliver compliant, high-quality services that improve patient outcomes and operational efficiency.
In response to a rapidly changing talent landscape, we have restructured our talent acquisition framework to incorporate automation, data-driven analytics, and innovative hiring methodologies. These enhancements have enabled us to attract and onboard high-caliber professionals more efficiently, while delivering a unified and branded candidate experience.
Recognizing the imperative to future-proof our capabilities, we have launched targeted upskilling initiatives focused on building advanced technological competencies. This approach not only strengthens our internal talent pipeline but also supports agile deployment across new business opportunities.
Employee engagement remains a strategic priority, particularly in a hybrid work environment. We have invested in digital platforms, leadership engagement forums, and immersive virtual experiences to reinforce organizational culture and sustain morale across distributed teams.
Furthermore, we have integrated our HR systems with core business processes to improve operational efficiency and enhance decision-making. These integrations provide managers with real-time insights and enable more responsive workforce planning.
Collectively, these initiatives reflect Sagilitys strategic focus on building a resilient, future-ready workforce one that is equipped to support scalable healthcare transformation and deliver sustained value to our clients, shareholders, and stakeholders.
Keeping Technology at the core of Service Delivery
Technology is central to how we deliver value to our clients. Over the years, weve invested deeply in building a suite of scalable, technology-enabled services powered by proprietary platforms and tools to drive operational efficiencies.
Our platforms support everything from core insurance functions to end-to-end RCM. Whether its helping care teams connect with Members through our Aging in Place platform, streamlining provider interactions with Provider Forward, or enabling seamless utilization management and claims processing our solutions are designed to meet real-world healthcare needs.
We continue to harness automation, analytics, AI, and machine learning to make workflows smarter. From automated claims review and denial management to intelligent content extraction and predictive modeling, our technologies help clients make faster, more informed decisions.
Our Nurse Assist tool is one such example an AI- powered assistant that summarizes clinical documents to support accurate and timely medical reviews. Tools like this exemplify how we blend domain expertise with innovation to improve speed, precision, and patient outcomes.
Were also enhancing engagement across the board leveraging speech analytics and intent recognition to better understand Member and Provider interactions and using automation to reduce friction in processes like registration, claims handling, and provider data validation.
In 2024, we took a step forward with the acquisition of BirchAI, a company specializing in cloud based GenAI technology in healthcare. Their GenAI-powered, realtime support tools enhance how we manage interactions, summarize interactions, and surface insights. This acquisition accelerates Sagilitys AI Center of Excellence for client transformation boosting our ability to drive efficiencies in areas like clinical decision support, and customer engagement across payer and provider clients.
Expanding Our Reach in the Mid-Market Payer Segment
In line with our strategy to expand and diversify our client base, Sagility acquired BroadPath Healthcare Solutions, a U.S.-based healthcare services provider. This acquisition has significantly strengthened our presence in the mid-market payer segment, adding over 30 new clients and expanding our capabilities in member acquisition and enrolment in addition to member engagement, claims administration, and provider credentialing. BroadPaths pioneering work-from-home model and proprietary Bhive platform complement our delivery excellence, while their strong leadership team and client relationships position us to drive deeper value across health plans, Third-party administrators (TPAs), Pharmacy Benefit Managers (PBMs), and providers. Were excited about the opportunities this unlocks for cross-selling and accelerating transformation for our stakeholders. This acquisition marks a significant step in our journey to deepen client relationships and expand our footprint in the mid-market payer space.
Recent Market Shifts Impact on Payers:
Payers are navigating a complex landscape shaped by rising Medicare utilization and Medicaid funding cuts. These pressures are compressing margins due to increased medical costs, administrative strain, and reduced premium inflows. In response, payers are accelerating outsourcing in high-impact areas such as utilization management, risk adjustment, and payment integrity. In addition, Sagility stands to benefit significantly from the growing adoption of AI and automation in payer operations. We are positioned to capture this demand for intelligent, platform-led outsourcing solutions.
Impact on Providers:
Providers are likely to face even greater financial strain due to lower reimbursement rates, increased supply chain costs from tariffs, and rising volumes of uncompensated care following Medicaid cuts. These challenges are prompting providers to seek cost optimization through outsourcing, particularly in RCM, processes such as, benefit and eligibility checks, denial management, and prior authorization support. Sagility is well-positioned to support these needs with its domain expertise in front- end and back-end RCM services, and its investments in GenAI-powered tools for patient engagement and administrative efficiency. As providers look to reduce cost-to-collect and improve operational resilience, Sagilitys capabilities in automation and process optimization offer a compelling value proposition.
Strategic Acquisitions: Accelerating Capability and Reach
We have pursued acquisitions to deepen our domain expertise, expand our service offerings, and enhance the value we deliver to our clients. Through these strategic moves, we gain access to specialized talent, differentiated capabilities, and new client relationships? accelerating our ability to scale in high-growth areas and strengthen our presence in key markets.
Acquisition of Devlin Consulting enhances our payment integrity (PI) capabilities
In April 2023, we acquired Devlin Consulting, Inc. (DCI) to enhance our precision PI solutions for health plans. The integration expands our capabilities in pre-pay cost avoidance and post-pay recoveries, improving access across national and regional plans.
Acquisition of BirchAI augments our AI-driven capabilities
In March 2024, we acquired BirchAI, a GenAI company offering -GenAI powered real-time customer support for healthcare transactions. The acquisition strengthens our AI capabilities across areas like enabling deeper client engagement and value creation.
Acquisition of BroadPath expands market presence and capabilities
In January 2025, we acquired BroadPath Healthcare Solutions for approximately Rs502 crore in an all-cash deal, aiming to strengthen our position in the U.S. healthcare payer sector. BroadPath, a U.S.-based healthcare services provider with an estimated annual turnover of $70 Million in CY 2024, brings an expanded client base, enhanced service capabilities, and opportunities for financial synergies.
Threats and challenges to our Business
Despite being a leading tech-enabled healthcare service provider, our business could face challenges due to an evolving market, potential new entrants, and shifting enterprise strategies. A slowdown in commercial and/ or government spending in the U.S. healthcare industry could impact demand for our services. Growing concerns around data privacy, compliance, and a shift toward in-house models may reduce outsourcing adoption. Talent shortages, high industry attrition, and upskilling gaps could impact our operational efficiency and profitability. Rapid technological advancements could disrupt existing processes if we fail to deliver integrated, high-performance solutions. Additionally, emerging competitors with innovative models may intensify market pressure and challenge our growth trajectory. While these risks exist, we believe the opportunities are greater.
Opportunities Ahead
1. Expanding U.S. Healthcare Market & Increasing Outsourcing Penetration
U.S. healthcare industry, is projected to grow to US$6.62 Trillion by 2028, driven by aging demographics, chronic disease prevalence and shifts towards value-based care. The outsourced operations spend in the U.S. healthcare market is also expected to rise to more than US$253 Billion by 2028. Sagility is well-positioned to benefit from this trend.
2. Technology-Driven Differentiation
Sagilitys investments in proprietary platforms and Al-powered solutions enhance its ability to deliver scalable, intelligent services. These capabilities offer a competitive edge in automation, analytics, and digital transformation. Innovations like Nurse Assist and the integration of BirchAI are enhancing both clinical and operational outcomes for our clients.
3. Mid-Market Expansion
Sagility is sharpening its strategic focus on the mid-market segment of the U.S. healthcare industry?a space comprising of regional health plans, Blue Cross Blue Shield affiliates, and smaller payer organizations that are increasingly looking for cost-effective, scalable, and domain-driven solutions. These organizations often face the same complexity as large enterprises but lack the internal infrastructure or partner ecosystem to manage it efficiently.
4. BroadPath
The acquisition of BroadPath has strengthened Sagilitys presence in the mid-market segment. This move expands Sagilitys client base and Offerings and enhances its ability to deliver tailored solutions to a broader spectrum of healthcare clients. With this integration, Sagility is unlocking new growth avenues by leveraging cross-sell opportunities and enhanced client engagement
5. Pursuing Strategic Acquisitions to Accelerate Growth
Our M&A strategy remains focused on targeted, capability-led growth that strengthens our healthcare domain leadership.
Financial Performance Discussion on Financial Position on consolidated financial results Equity share capital
We have one class of shares, and the authorized equity share capital of the Company is Rs 100,000 Million with 10,000 Million equity shares of Rs 10 each.
During the year, the share capital increased due to the issuance of 394 Million equity shares with a face value of Rs 10 each to Sagility BV (Promoter and Holding company of Sagility India Limited).
Other Equity
The increase in securities premium is on account of issuance of 394 Million shares (as explained above) at a premium of Rs 18.3 per share. The increase in retained earnings was on account of profit earned during the year.
Borrowings
As of 31st March 2025, unsecured borrowings stood at Rs 8,170 Million, down from Rs 19,335 Million as of 31st March
2024. This reduction in borrowing is mainly attributed to the conversion of debt to equity and repayment of Debt to Sagility BV (Promoter and Holding company of Sagility India Limited).
Deferred tax assets & liabilities
Deferred tax liability as of MarRs 25 is primarily on account of intangibles from acquisitions.
Deferred tax asset as of MarRs 25 is mainly on account of Property, plant and equipment, lease liabilities, tax concessions and compensated absences & intangibles from acquisition.
Lease liabilities
Lease liabilities for the Company as on 31st March
2025, were Rs 5,850 Million. We added 10 new sites and consolidated 7 sites, leading to total of 33 sites by end of the year. All of our sites are leased.
Provision for employee benefit obligations
Provision for employee benefit obligations represents gratuity, leave encashment, and pension liability, and the increase is primarily due to an increase in headcount. These liabilities are determined based on the actuarial valuation.
Financial liabilities
The decrease in financial liabilities is mainly due to payment of pending purchase consideration in relation to acquisition of healthcare business from HGS in JanRs 22.
Other liabilities
Other liabilities include statutory dues and advance from customers. Statutory dues consist of withholding and other contributions payable in various countries where we operate.
Tax assets / liabilities
These comprise of tax amounts recoverable from & payable to Government Authorities
Goodwill
Sagility was formed by the acquisition of healthcare business from Hinduja Global Solutions (HGS) in January 2022 by Sagility B.V (earlier known as Betaine B.V). The excess of purchase consideration over fair value of assets was allocated to Goodwill and Other Intangible Assets. Goodwill from the acquisition of the healthcare business from HGS constitute to Rs 51,701 Million
Additional goodwill of Rs 4,887 Million was due to acquisitions (DCI, BirchAI and Broadpath) made by Sagility in fiscal years 2024 and 2025 and balance Rs 3,802 Million is due to forex movements.
Property, plant and equipment
Our property, plant, and equipment primarily consist of computer equipment and leasehold improvements. During the year, there was a net decrease in the net block due to the disposal of some of these assets.
Other intangible assets
As covered above under "goodwill, Intangible primarily arises from the acquisition of healthcare business from HGS in January 2022. Additions to Intangibles are on account of acquisitions made by Sagility in fiscal years 2024 and 2025. These intangibles are being amortized over their useful life.
Other financial assets
Other financial assets comprise security deposits mainly towards lease premises and derivative financial assets (Forward Contracts).
Other tax assets
The reduction is due to the income tax refund received during the year.
Other non-current assets
Other non-current assets comprise of prepaid expenses and balance with government authorities.
Trade receivables
Days Sales Outstanding (DSO) was 76 days for the year ended 31st March 2025, compared to 85 days in the previous year. DSO is calculated considering both Unbilled Revenues and Trade Receivables.
Cash and bank balances
Our cash and cash equivalents comprise of deposits with banks which can be withdrawn at any point of time without prior notice or penalty on principal.
Other current assets
Other current assets comprise balances with government authorities, advances to employees, prepaid expenses, advances to suppliers and contract assets being the excess of revenue earned over billings in respect of customer contracts.
Result of Operations based on consolidated financial results
The table below shows the companys consolidated income and expenses for FY25 and FY24.
Particulars |
For the year ended 31st March 2025 |
For the year ended 31st March 2024 |
||
(in Rs Million) | % of Total income | (in Rs Million) | % of Total income | |
Income |
||||
Revenue from operations |
55,699.18 | 99.00% | 47,535.57 | 99.42% |
Other income |
563.08 | 1.00% | 279.47 | 0.58% |
Total income |
56,262.26 | 100.00% | 47,815.04 | 100.00% |
Expenses |
||||
Employee benefits expense |
34,989.01 | 62.19% | 29,376.44 | 61.44% |
Other expenses |
7,731.35 | 13.74% | 7,278.23 | 15.22% |
Total expenses |
42,720.36 | 75.93% | 36,654.67 | 76.66% |
Earnings before interest expense, taxes, depreciation and amortisation |
13,541.90 | 24.07% | 11,160.37 | 23.34% |
Finance costs |
1,271.03 | 2.26% | 1,851.45 | 3.87% |
Depreciation and amortisation expenses |
4,668.56 | 8.30% | 6,892.11 | 14.41% |
Profit before tax |
7,602.31 | 13.51% | 2,416.81 | 5.05% |
Tax expense: |
||||
Current tax |
2,628.76 | 4.67% | 1,115.24 | 2.33% |
Deferred tax |
(417.68) | -0.74% | (981.09) | -2.05% |
Total tax expense |
2,211.08 | 3.93% | 134.15 | 0.28% |
Profit for the year |
5,391.23 | 9.58% | 2,282.66 | 4.77% |
Revenue from operations
Revenue from operations increased by 17.2% to Rs 55,699 Million for FY25 from Rs 47,536 Million for FY24. This increase was due to growth from existing clients, new deal wins & acquisition of Broadpath.
Revenue growth in reported terms include the impact of currency fluctuations. We therefore, additionally report the revenue growth in constant currency. Our Revenues from Operations in FY25 in constant currency terms was US$ 568.3M a 14.9% increase over FY24 (US$ 572.9M)
Further, the Company also added 38 new clients in the FY25, which also contributed to the increase in our revenue from operations.
Revenue from our Payer clients increased by 16.0% while Revenue from our Provider clients increased by 27.9%. Revenue from operations from our top five clients increased by 15.3% to Rs 43,370 Million for FY25 from Rs 37,628 Million for FY24. Below is a table showing revenues from our top 3, top 5, and top 10 client groups, both in absolute terms and as a percentage of total revenue.
Particulars |
For the year ended 31st March 2025 |
For the year ended 31st March 2024 |
||
(in Rs Million) | % of Revenue from Operation | (in Rs Million) | % of Revenue from Operation | |
Top 3 Clients |
36,847.71 | 66.16% | 32,476.84 | 68.32% |
Top 5 Clients |
43,370.27 | 77.87% | 37,627.68 | 79.16% |
Top 10 Clients |
50,423.31 | 90.53% | 43,451.78 | 91.41% |
*Clients comprise client entities together with their affiliates.
Other income
Other income consists of income from investments, foreign exchange gains, gains on lease modifications, and interest on income tax refunds.
Employee benefits expense
Employee benefits expenses have increased as a percentage of revenue from 61.8% in FY24 to 62.8% in FY25 mainly due to one-time increase in fair value of share-based payment awards. The one-time increase in the fair value of awards was due to the modification of awards from a cash-settled liability to an equity-settled liability. Employee benefit expenses, excluding share- based payment awards, decreased to 60.8% of revenues in FY25 from 61.6% in FY24. This reduction is attributed to increased offshoring and operational improvements.
Other expenses
Other expenses have decreased as a percentage of Revenue from 15.3% in FY24 to 13.9% in FY25. This decrease is mainly due to decrease in legal & Professional expense and improved site utilization.
Finance costs
Finance costs include interest on Promoter Debt and lease liabilities. The expense decreased as the borrowings came down as a result of repayment as also conversion of Promoter Debt to Equity as detailed under "Borrowings.
Depreciation and amortization expense
Depreciation and amortization expense decreased by 32.3% to Rs 4,669 Million for FY25 from Rs 6,892 Million for FY24 mainly because the intangible created in relation of acquisition of healthcare business in India in Jan 2022 got fully amortized by FY24.
Tax expenses
2025 | 2024 | |
Income tax expenses (in Rs Million) | 2211.23 | 134.20 |
FY25 has higher taxes on account of higher Profits. FY25 also had one-time increase in the fair value of Share- based payment awards (details under section "Employee Benefit Expense) which is non-deductible expense for Income tax purposes. FY24, additionally, had tax incentive for earlier years on account of employment generation in India.
Liquidity and capital resources cash flows based on consolidated financial results
The following table summarizes our cash flows data for the periods indicated
Particulars |
FY25 | FY24 |
Net cash flow from operating activities | 12,141 | 9,733 |
Net cash flow generated from/ (used in) from investing activities | (9,642) | (4,691) |
Net cash flow used in financing activities | (2,561) | (7,513) |
Cash and cash equivalents at the beginning of the year | 3,441 | 5,853 |
Foreign exchange gain on translating Cash and cash equivalents | 58 | 60 |
Cash and cash equivalents at the end of the year | 3,438 | 3,441 |
Operating Activities
Our cash flows from operating activities have increased in FY25 compared to FY24 due to increase in net profits adjusted for non-cash items, improvement in DSO and Tax refunds.
Investing Activities
The cashflows used in Investing Activities in FY25 primarily represent payment for acquisition of BroadPath and payment of pending purchase consideration for acquisition of healthcare business from HGS in Jan 2022.
In FY24, the cash flows used in Investing Activities primarily represent payment for acquisition of Devlin Consulting Inc (DCI) and Birch.
Financing Activities
Net cash flows used in financing activities for FY25, were primarily due to repayment of unsecured borrowings to Sagility B.V (Promoter) for Rs 3,699 Million and repayment of lease liabilities with associated interest on both.
In FY25, there was inflow from Sagility B.V (Promoter) for Rs 3,708 Million through share issuance.
In FY24, net cash flows used in financing activities were primarily due to repayment of unsecured borrowings to Sagility B.V (Promoter) for Rs 4,281 Million and repayment of lease liabilities with associated interest on both.
Key financial ratios based on consolidated financial results
Particulars |
FY25 | FY24 |
Debtors turnover (x) | 6.44 | 6.26 |
Current ratio (x) | 1.67 | 1.18 |
Debt-equity ratio (times) | 0.17 | 0.39 |
Earnings per share () | 1.17 | 0.53 |
Interest coverage ratio (x) | 10.65 | 6.03 |
EBITDA margin (%) | 24.3% | 23.5% |
PAT margin (%) | 9.7% | 4.8% |
Adjusted EBITDA* margin (%) |
26.4% | 24.1% |
Adjusted PAT** margin (%) |
14.6% | 12.4% |
Adjusted Return on Capital Employed# (%) |
54.9% | 47.0% |
Return on Net Worth" (%) | 7.3% | 3.6% |
*Adjusted EBITDA represents EBITDA adjusted for postcombination expenses in relation to earnouts payable under the acquisition agreements and Share based payment awards and excludes other income
**Adjusted PAT represents profit/(loss) adjusted for postcombination expenses in relation to earnouts payable under acquisition agreements, Share based payment awards; amortization of other intangible assets acquired pursuant to business combinations, and for the tax impact of each of the adjustments
#The Adjusted Return on Capital Employed (ROCE) is calculated by taking the Adjusted Profit After Tax (PAT) plus interest cost, divided by the adjusted capital employed. The adjusted capital employed is determined as the total assets excluding goodwill and intangible assets, minus current liabilities.
"Return on net worth is calculated by dividing the Profit After Tax by the average of the opening and closing total equity balance.
The rise in the debtor turnover ratio during this period is attributed to improvement in client collections.
The companys current ratio improved in FY25 due to the payment of the pending purchase consideration related to the acquisition of the healthcare business in January 2022.
The debt-equity ratio decreased as a result of reduction of Promoter and infusion of additional equity (refer section: cashflow from financing activities). The EBITDA margin increased to 24.3% in FY25 from 23.5% in FY24 due to operational improvements and increase in offshoring EBITDA % is calculated as EBITDA as a % of Revenue from Operations.
Earnings per share increase by 120.8% is attributed to increase in profits on account of increase in EBITDA & reduction in amortisation expense and lower interest cost.
The interest coverage ratio rose to 10.65 for FY25, up from 6.03 in FY24, due to increase in EBITDA and reduction in interest costs.
PAT Margin increase to 9.7% in FY25 from 4.8% in FY24 is attributed to increase in EBITDA margin, lower amortisation and Interest expenses. PAT% is calculated as PAT as a % of Revenue from Operations.
Return on Net Worth (%) increased to 7.3% in FY25, up from 3.6% in FY24, primarily driven by increase in profit after tax. The Return on Net Worth is in single digits due to the higher equity associated with goodwill and intangible assets that got created and accounted during the acquisition of healthcare business from HGS in January 2022.
The Promoter entity (Sagility B.V) invested into Operating entities (Sagility India and its subsidiaries) through Debt and Equity. The proceeds from these investments were utilised to acquire the healthcare business from HGS in Jan 2022.
As outlined in the section on "borrowings, substantial promoter debt has been subsequently repaid and converted into equity.
Adjusted EBITDA margin (%) increased to 26.4% in FY25 from 24.1% in FY24 due to operational improvements and increase in offshoring.
Adjusted PAT margin (%) increase to 14.6% in FY25 from 12.4% in FY24 is attributed to increase in Adjusted EBITDA margin & lower amortization and Interest expense.
Adjusted Return on Capital Employed (%) increased to 54.9% in FY25 from 47.0% in FY24 is attributed to increase in Adjusted PAT.
Risk Management
At Sagility, effective risk management is integral to sustaining our leadership in healthcare business process management and delivering consistent value to our clients, employees, and stakeholders. In an evolving global landscape marked by regulatory shifts, technological advancements, and operational complexities, our approach to risk is both proactive and adaptive.
This section of the Annual Report details Sagilitys key risks and their mitigation strategies. Our risk governance is embedded across all levels of the organization, ensuring accountability, resilience, and compliance with industry standards and client expectations.
Sagility India Limited - Risk Mitigation Summary
Risk Theme |
Description |
Mitigation |
Sector and Client Concentration Risks | Sagility derives 100% of its revenue from the U.S. healthcare industry, making it vulnerable to regulatory, economic, and outsourcing trends in that market. | Diversification within the U.S. healthcare space by serving both Payers and Providers and expanding into clinical services and pharmacy benefit management. |
A significant portion of revenue is concentrated among a few large clients, with the top 10 contributing over 90% of total revenue. | Strategic entry into the mid-market segment through the acquisition of BroadPath, which broadens client base and service scope. Enhanced focus on becoming a truly tech-led BPaaS provider in U.S. Market by capitalising on automation and innovation | |
Payer industry is a consolidated market, and Sagility serves 6 of the Top 10 Payers. We structure multiyear contracts with performance- based metrices that align incentives and ensure revenue stability. Sagility enhances client relationships through deep connections and multiple organizational touch points. | ||
Technology and Platform Dependency | Rapid technological evolution poses a risk of obsolescence or disruption to Sagilitys proprietary platforms and service delivery tools. | Sagility invests in integrating advanced technologies into its service delivery, ensuring clients benefit from optimized operational efficiency and scalable solutions. |
The BirchAI acquisition has introduced proprietary automation and conversational AI platforms, which, when coupled with Sagilitys healthcare domain expertise, will significantly enhance the client experience | ||
Dedicated AI automation / Technology team of 300+ employees supporting the global delivery. | ||
Alliances with technology companies helps leverage tools, while Sagility provides domain expertise during implementation and service delivery | ||
Cybersecurity and Data Privacy | Exposure to data breaches involving sensitive health information. | We have established a robust cybersecurity framework and invested in advanced digital solutions such as firewalls, encryption technologies, and access controls to ensure the protection of sensitive data. |
Non-compliance with stringent U.S. regulations such as HIPAA, HITECH, and CCPA could result in penalties and reputational damage. | We conduct periodic risk assessments and testing, both internally and with external experts, to proactively identify and address vulnerabilities | |
We engage in ongoing training and awareness initiatives to cultivate a security-conscious culture within the organization | ||
Additionally, we have taken insurance coverage to reduce financial exposure arising out of a cyberattack. | ||
Talent Management and Attrition | Higher voluntary attrition rates (>28%) and rising employee costs could impact service delivery and margins. | Competitive compensation packages and benefits, commensurate with the job family in line with the market, to attract and retain talent. |
Difficulty in retaining skilled professionals in a competitive labor market. | Use internal training programs to ensure workforce readiness. | |
Multiple employee engagement initiatives to enhance satisfaction and productivity | ||
Annual Employee Satisfaction surveys to identify areas of concern that may lead to employee turnover, enabling targeted areas of improvements. | ||
Contractual and SLA Risks | Failure to meet service-level agreements (SLAs) could lead to financial penalties or client dissatisfaction. | Sagility has a well-established process for monitoring of SLA compliances, including leadership initiatives to address any non-compliances, resulting in a continuous SLA compliance rate of above 95% |
|
Clients have the right to terminate contracts without cause, increasing revenue volatility. | The operational nature of our services and our excellent track record in delivering above client expectations result in high stickiness of clients |
We restructure contracts to link a portion of fees to measurable outcomes and volumes, thereby reducing perceived risk for clients and encouraging long-term partnerships | ||
Regulatory and Licensing Risks | Complex licensing requirements in the U.S. for operating as a third- party administrator (TPA), pharmacy benefit manager (PBM), and utilization review entity. Risk of noncompliance with Indian and international laws, including data protection and labor regulations. | A comprehensive global compliance management framework is in place to ensure compliance to statutes across all geographies. |
A global privacy policy covering all geographies and stakeholders provides a consistent framework, strengthening the mitigation strategy by ensuring adherence to privacy regulations. | ||
Conduct risk-based due diligence on critical vendors, ensuring that vendor contracts contain privacy obligations. | ||
We conduct mandatory training sessions, workshops, and continuous awareness campaigns to enhance knowledge and vigilance. | ||
Litigation and Legal Exposure | Litigation risks might arise from commercial disputes, alleged violation of intellectual property rights/trade secret personal data/information breach incidents/claims and employment related matters. | Continuously strengthen internal processes and controls to adequately ensure compliance with contractual obligations, information security, and intellectual property laws |
Ongoing litigation with Synergy Global Outsourcing LLC. The potential damages could be up to US$115.9 Million. | Robust mechanism to track, respond against notices and litigation claims | |
The ongoing litigation with Synergy Global Outsourcing LLC is indemnified by Hinduja Global Services Inc (HGSI) and covered by a bank guarantee | ||
Financial and Credit Risks | Exposure to client credit risk and delayed payments, especially from smaller or financially constrained clients. | Strong cash flow from operations, supported by disciplined working capital management. Strong credit monitoring practices to mitigate receivables risk. |
Business Continuity | Disruptions to business operations due to unforeseen events such as natural disasters, pandemics, or major IT outages could impact Sagilitys ability to continue providing services efficiently | We have developed a robust Business Continuity Plan that encompasses disaster recovery strategies and contingency measures, ensuring our operations can be quickly restored from any disruptions. We conduct regular audits and simulations to evaluate and enhance the readiness and strength of our business continuity strategies. |
Our network of nearshore delivery centers in Colombia and Jamaica, combined with multiple sites in offshore centers (in India and the Philippines), forms a strategic hybrid model. This setup substantially enhances our failover capabilities, ensuring a continuation of services in the event of disruptions at any site. | ||
ESG |
Environmental, Social, and Governance (ESG) issues have become significant as regulators, investors, and clients demand sustainable and ethical business practices. Failure to adequately manage ESG risks could lead to reputational damage, regulatory penalties, and operational inefficiencies. | We have established a comprehensive management system aligned to a global reporting framework to monitor ESG performance and drive improvements across all company operations. ESG principles have been seamlessly embedded into our business operations and decision-making processes, ensuring compliance with global sustainability standards and fulfilling stakeholder expectations. |
Internal Control Systems and Their Adequacy
At Sagility, our internal controls are aligned with our business processes and are supported by robust IT systems, regular internal audits, and adherence to globally recognized frameworks. These controls encompass financial and accounting practices, information security, data privacy, and compliance with healthcare regulations such as HIPAA and HITRUST. The management have used independent consultants to assess the effectiveness of Companys internal controls over the financial reporting. Additionally, Our internal auditors Ernst & Young LLP have conducted a review and have monitored the implementation and effectiveness of these controls.
BSR & Co LLP, the statutory auditors of Sagility India Limited, have issued their report on the Companys internal financial controls (as defined in Section 143 of the Companies Act, 2013). This report covers the effectiveness of internal financial controls over the Standalone and the Consolidated financial statements as of 31st March 2025.
Cautionary Statement
This document contains forward-looking statements that involve risks, uncertainties, and assumptions, which may include but are not limited to statements regarding the Companys business strategy, future operations, expected financial position, and anticipated developments in the industry. These statements are based on current expectations, estimates, and projections and are not guarantees of future performance. Actual results may differ materially due to various factors, including changes in regulatory environments, market conditions, competitive pressures, operational risks, client decisions, and economic conditions.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248, DP SEBI Reg. No. IN-DP-185-2016
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.