Indegene Ltd.: Strong topline growth driven deal wins- Company Update

We maintain BUY on Indegene with target price at Rs 610. Indegene reported strong topline growth on the back of deal wins (secured marquee deal wins, including two >US$10m ACV contracts and one >US$5m ACV engagement). It added 8 clients with US1mn+ revenue in Q3 along with adding 1 25 mn>$+ client. Margins were impacted by one-time M&A and legal costs. We expect margins to normalize in the range of 18.5-19% over the next few quarters. PAT growth was flat to negative due to the amortization impact from the Biopharm deal (Rs 150 mn), this is expected to normalize by FY28e. We continue to model mid-teens growth, supported by strong commercial execution, rising digital adoption across pharma, and a healthy deal pipeline.

Healthy topline growth supported by deal wins:

Indegene delivered robust revenue growth in Q3FY26, led by sustained momentum across its ECS and EMS segment. The co. continued to diversify its client portfolio, reducing top-client dependency (55% vs 58.9% from top 10 clients YoY). Indegene was able to convert 2 clients from 1-10 mn$ to 10-25 mn$, in-line with its efforts to mine existing clients. Tectonic contributed US$1mn+ in Q3 (US$2mn in H1FY26), with the entity converting multiple clients to paid contracts; initial deal values remain modest.

Margins impacted by M&A costs, expected to normalize:

EBITDA margins were impacted in Q3 due to a one-time M&A integration and legal expenses (Rs 105 mn). Excluding these, core margins remained flattish YoY. We expect margins to gradually improve and stabilize at 18.5–19% over FY26–27e, supported by operating leverage and offshore mix improvement. Continued investments in GenAI and higher revenue contribution per employee (highest in the industry) are expected to enhance productivity and offset cost pressures.

Outlook:

Indegene remains well-positioned to benefit from the increasing digital spend from Pharma and life science companies. Its strong client relationships (top 20 pharma companies), expanding service portfolio, and increasing focus on AI-driven solutions provide long-term visibility. With a healthy deal pipeline and a broadening geographic presence, we expect steady earnings growth over FY27–28E. We expect full impact of Biopharm’s acquisition to be visible by FY28e.

Valuations, view & risks:

We are factoring in 17.3%/18.2%/16.5% Revenue/EBITDA/PAT over FY25-FY28E, and value the company at 25x Q3FY28 PE, resulting in a TP of Rs 610. We believe the company can continue growing at mid-teens (without acquisitions) over the next 2 years, along with 18.5-19.5% margins and a strong balance sheet. Our base case estimates do not factor any acquisitions. Key risks: Increased competition globally, slower deal wins and mining of top 20 clients, and a delayed industry recovery.

Company website: https://www.indegene.com/

*CMP is as per report published date

Click to download the full Indegene Ltd Q3FY26 Company Update

Analyst:

• Vinay Menon - Senior Research Analyst, Institutional Equities (NISM-201600112117)
• Miloni Mehta - Research Associate, Institutional Equities (NISM-201800127664)

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FAQs on Indegene Ltd Q3FY26 Company Update

Indegene’s growth outlook is driven by large deal wins, rising digital adoption in the global pharma sector, and improving operating leverage. Here are key investor-focused insights based on institutional research.

1. What is the investment view on Indegene?

MNCL maintains a BUY rating on Indegene with a target price of ₹610, implying a potential upside of 26.6% from the current market price.

2. What is driving Indegene’s revenue growth?

Strong topline momentum is supported by marquee deal wins, including multiple large contracts, expansion within existing clients, and increasing digital spend by global pharma companies.

3. Why were margins under pressure in the recent quarter?

Margins were impacted by one-time M&A integration and legal expenses. Core operating performance remained stable and margins are expected to normalize to 18.5–19% over FY26–27.

4. What are the long-term growth drivers for the company?

Key drivers include strong relationships with top global pharma companies, expansion of AI and GenAI-led solutions, a healthy deal pipeline, and growing demand for digital commercialization services.

5. What are the key risks to the outlook?

Risks include slower deal conversion, increased global competition, weaker client spending, and delays in recovery in the life sciences technology spending cycle.

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