Are Inspirisys Solutions Ltd latest results good or bad?

Inspirisys Solutions Ltd has reported notable financial results for the second quarter of FY26, showcasing a significant turnaround amidst a challenging IT services environment. The company achieved net sales of ₹119.71 crores, reflecting a year-on-year growth of 42.26% and a sequential growth of 41.50% from the previous quarter. This recovery indicates strong operational momentum, particularly following a previous quarter where sales had declined. The consolidated net profit for the quarter reached ₹7.40 crores, which represents a substantial year-on-year increase of 96.29% and a sequential rise of 20.52%. This improvement in profitability is accompanied by an operating margin of 10.20%, marking the highest level achieved in the last seven quarters. The profit after tax (PAT) margin also improved to 6.13%, demonstrating enhanced operational efficiency compared to the same period last year. Despite these positive developments, the company has experienced significant revenue volatility over recent quarters, with sales fluctuating between ₹79.51 crores and ₹120.34 crores. This pattern underscores the challenges faced by smaller IT firms in maintaining consistent deal flows. Additionally, the company has seen a notable increase in long-term debt, which rose to ₹79.74 crores, raising concerns about leverage and financial risk. In terms of cash flow, Inspirisys generated operating cash flow of ₹38.00 crores for the fiscal year ended March 2025, an improvement from the previous year. However, the company also deployed a significant amount in investing activities, which has led to a negative net cash inflow. Overall, while Inspirisys Solutions Ltd has demonstrated strong operational performance in the latest quarter, the underlying revenue volatility and elevated debt levels warrant careful monitoring. The company has seen an adjustment in its evaluation, reflecting the complexities of its financial landscape and the need for sustained performance to build investor confidence.