Are Indegene Ltd latest results good or bad?

Indegene Ltd's latest financial results for Q2 FY26 present a mixed picture. The company reported net sales of ₹804.20 crores, reflecting a sequential growth of 5.70% and a year-on-year increase of 17.09%. This marks the seventh consecutive quarter of positive revenue growth, indicating the company's ability to capture market share within the healthcare services sector. However, the net profit for the quarter was ₹102.10 crores, which represents a sequential decline of 12.29%.
Profitability metrics show a concerning trend, with the operating margin (excluding other income) contracting to 17.48% from 20.41% in the previous quarter, and the PAT margin decreasing to 12.70% from 15.30%. This margin compression suggests challenges in cost management, particularly as employee costs rose significantly, accounting for a larger proportion of revenue compared to prior periods.

Despite these profitability challenges, the company's valuation appears attractive relative to its peers, with a price-to-earnings ratio that is lower than the sector average. However, the recent bearish technical trends and the stock's performance, which has lagged behind the broader market, indicate that investor sentiment may be cautious.

The company saw an adjustment in its evaluation, reflecting the balance of strong revenue growth against the backdrop of deteriorating margins. Overall, while Indegene Ltd continues to show robust revenue growth, the operational challenges and margin pressures warrant close monitoring as the company navigates its financial landscape.