About Sagility India Limited

Sagility India provide technology-enabled business solutions and services to clients in the U.S. healthcare industry. They are a pure-play healthcare focused services provider, and their clients include Payers (U.S. health insurance companies, which finance and reimburse the cost of health services) and Providers (primarily hospitals, physicians, and diagnostic and medical devices companies). Their services to Payers cater to various aspects of their operations including (i) core benefits administration functions such as claims management, enrolment, benefits plan building, premium billing, credentialing, and provider data management and (ii) clinical functions such as utilization management, care management, and population health management. Their services to Providers include revenue cycle management functions such as financial clearance, medical coding, billing, and accounts receivable follow-up services. Additionally, they also provide some of the services that they provide to Payers to pharmacy benefit managers (“PBMs”) that manage prescription drugs for Members (i.e., insured persons) under health insurance plans. They deliver these services leveraging their tools and platforms, as needed, through their capable talent pool from their five global service delivery locations in India, the Philippines, the U.S., Jamaica and Colombia.

The Company were ranked as a Leader by Avasant in their Clinical Services Business Process Transformation RadarView report 2023 and as a Leader in Everest’s Healthcare Payer Operations PEAK Matrix Assessment 2023. All of their clients are located in the U.S. As of June 30, 2024, their five largest client groups (i.e., client entities together with their affiliates) had an average tenure of 17 years with the Business. Further, during the Financial Years 2024 and 2023 and the quarter ended June 30, 2024, they have added 22 new clients. In the Financial Year 2024, they helped their Payer clients process 105 million claims and handle over 75 million Member and Provider interactions. 

As of June 30, 2024, the Company had 35,858 employees, of which 60.68% were women. The Bankers of the Sagility India Limited are HDFC Bank Limited, Standard Chartered Bank, Axis Bank Limited, ICICI Bank Limited and Hongkong and Shanghai Banking Corporation Limited. 

Healthcare operations overview
Healthcare payers engage in a diverse set of activities to ensure operational efficiency and seamless experience for the individuals they cover, referred to as members. These activities can be categorized into seven broad value chain segments across front- and back-office, as shown in the process map below. The process map excludes non-business process operations such as pureplay Information Technology (IT) development and SaaS, IT services, and maintenance.

Apart from core care delivery, healthcare providers undertake a wide range of activities to reduce administrative burden, improve efficiency, and ensure robust patient experience. The processes involved can be categorized into five broad value chain segments across front-office and back-office, as shown in the process map below. The process map excludes non-business process operations such as pure play IT development and SaaS, IT services, and maintenance.

The total outsourced operations spend in the US healthcare market grew at a CAGR of ~6.1% from CY 2014 to CY 2023. As a result, in 2023, the aggregate outsourcing penetration rate in the US healthcare operations market stood at 21.5-23.5%, resulting in a total outsourced operations spend of approximately US$ 45.0 billion (₹ 3.8 trillion). The healthcare payer market had a relatively higher outsourcing penetration at 22.0-24.0%, while the healthcare provider market had a relatively lower outsourcing penetration at 19.5-21.5% in 2023.

Further, the growth in the outsourced operations market is expected to outpace the growth in the insourced market. While the overall healthcare outsourced operations market is expected to grow at a CAGR of approximately 8.7%, the payer outsourced market is forecasted to grow at a CAGR of approximately 7.0% from 2023-28. The provider operations outsourced market, on the other hand, is expected to grow at a CAGR of approximately 12.5%.

Generative AI refers to the application of artificial intelligence techniques that can generate new content in the form of text, images, videos, audio, and more. This technology is built on underlying models that are trained on large, extensive datasets. Some of the prominent GenAI models in the market include OpenAI's GPT, Google's Gemini, and Meta's LLaMA. GenAI has the potential to improve organizational productivity by streamlining a variety of tasks, thereby increasing efficiency, optimizing processes, and enhancing the overall patient/member experience. 

While GenAI shows promise in simplifying tasks with low-to-moderate complexity, the solutions still require humanin-the-loop engagements in the healthcare industry due to the degree of risk involved and regulatory concerns. Human intervention ensures that AI-generated outputs are reliable and error-free, particularly in critical decision-making processes. Moreover, the dynamic nature of healthcare demands adaptability and contextual understanding, areas wherein human expertise complements AI capabilities.

SAGILITY INDIA LIMITED COMPETITIVE STRENGTHS
1. Leader in the large and resilient U.S. Payer and Provider solutions market
2. Domain expertise in healthcare operations, with end-to-end service offerings to Payers and Providers
3. Suite of scalable, technology-enabled services and solutions, supported by proprietary tools and platforms
4. Deep, long-term, expanding client relationships across healthcare Payers and Providers
5. Multi-shore, scalable and flexible delivery model with certified data protection and service standards
6. Strong financial performance and high margins
7. Experienced management and board, motivated employee base, marquee sponsor support and a sustainability focused culture

SAGILITY INDIA LIMITED STRATEGIES
1. Strengthen their relationships with existing clients, expand their offerings and increase the share of their wallets
2. Establish new client relationships across categories
3. Enhance their portfolio of technology tools and platforms
4. Pursue strategic acquisitions and collaborations

SAGILITY INDIA LIMITED RISK FACTORS & CONCERNS
1. The business is solely focused on the U.S. healthcare industry and may be adversely affected by factors affecting the U.S. healthcare industry, including a decline in the growth of the U.S. healthcare industry, reduction in outsourcing and other trends.
2. Goodwill and other intangible assets are their largest assets.
3. One of their Independent Directors has received summons in relation to an ongoing investigation by SEBI of Linde India Limited and the matter is currently pending.
4. Anti-outsourcing legislation could adversely affect the business.
5. As a significant portion of the business is attributable to certain large client groups in the U.S., the business and profitability is dependent on their continuing relationships with such key clients.
6. They reported a restated loss for the period from July 28, 2021 until March 31, 2022.