Are Expleo Solutions Ltd latest results good or bad?

Expleo Solutions Ltd's latest financial results for Q2 FY26 reflect a complex operational landscape. The company reported a net profit of ₹39.76 crores, which represents a significant quarter-on-quarter increase of 94.62% and a year-on-year increase of 12.03%. Revenue for the same period was ₹282.70 crores, showing an 8.88% growth compared to the previous quarter and a 9.04% increase year-on-year. Operating margins also expanded to 16.53%, marking a notable improvement from earlier periods. However, the results were heavily influenced by a substantial rise in other income, which accounted for nearly 25% of the operating profit. This raises concerns about the sustainability of the earnings quality, as the core consulting business may not be experiencing the same level of strength as indicated by the headline figures. Despite the positive quarterly performance, Expleo Solutions faces challenges in maintaining consistent growth. The company has underperformed relative to the Sensex over various timeframes, with a notable decline in stock performance over the past year and three years. The latest data indicates a revision in its evaluation, reflecting the ongoing operational challenges and market dynamics. In the subsequent quarter, the company reported a decline in net sales and net profit, with net sales showing a decrease of 1.19% and a significant drop in net profit by 44.34% compared to the previous quarter. This suggests a potential reversal in the positive momentum observed in Q2 FY26 and highlights the volatility in Expleo Solutions' financial performance. Overall, while Expleo Solutions Ltd has demonstrated strong quarterly results, the reliance on non-core income and the recent downturn in financial metrics underscore the need for careful monitoring of its operational trends and market positioning.