Mehabe score: 4 G Factor: 3 Piotski Score: 6 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 6.
Description
Quick Heal Technologies is engaged in the business of providing security software products. The Company caters to both domestic and international market.
Main Points
Large National Footprint – Quick Heal derives more than 95% of its revenue from India. It operates through a large distribution network penetrating the Tier II and Tier III towns where the internet penetration is now increasing. The company also has a growing international presence, with offices in over 40 countries. To date, the company has installed more than 24 million products and has an active license user base of 9 million and 30,000 enterprise customers. Quick Heal has four international subsidiaries – QHT Japan, MENA, Africa, and America – all 100% held.Site:QUICKHEALMain Symbol:QUICKHEAL
Stock trades at 299.0, above its 50dma 273.93. It also trades above its 200dma 211.03. The stock remains bullish on techicals
The 52 week high is at 319.90 and the 52week low is at 113.65
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 24.63%
Weakness
– The company has delivered a poor sales growth of 1.97% over past five years.
– has a low return on equity of 12.30% for last 3 years.
– has high debtors of 165.09 days.
Competition
– The industry trades at a mean P/E of 35.3x. Happiest Minds trades at the industry’s max P/E of 137.18x. QUICKHEAL trades at a P/E of 16.6x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 9.0. QUICKHEAL has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 13.5%. The max 1- month return was given by L&T Technology: a return of 24.75 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 54.78 cr compared to Rs 73.46 cr for period ended Jun 2020, a fall of 25.4%
Operating Profits reported at Rs 5.2 cr for period ended Jun 2021 vis-vis 32.13 for period ended Jun 2020 .
Operating Margins contracted -3424.6 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 1.07 compared to Rs 6.19 for previous quarter ended Mar 2021 and Rs 3.89 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 314.0 cr for period ended TTM vis-vis sales of Rs 333.0 cr for the period ended Mar 2021, a fall of 6.1%. The 3 year sales cagr stood at -0.1%.
Operating margins shrank to 36.0% for period ended TTM vis-vis 42.0% for period ended Mar 2021, contraction of 600.0 bps.
Net Profit reported at Rs 88.0 cr for period ended TTM vis-vis sales of Rs 107.0 cr for the period ended Mar 2021, falling 21.6%.
Company reported a poor Net Profit CAGR of -1.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 99.0 cr for period ended Mar 2021 vis-vis Rs 71.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 141% on a 1 Year basis vis-vis a return of 2% over the last 3 Years. – The compounded sales growth on a TTM bassis is 16% vis-vis a compounded sales growth of 2% over the last 3 Years. – The compounded profit growth on a TTM basis is 45% vis-vis a compounded profit growth of 8% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.52% vis-vis 0.03% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 26.47% vis-vis 27.14% for Mar 2021
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 24.63% – The company has delivered a poor sales growth of 1.97% over past five years.
– has a low return on equity of 12.30% for last 3 years.
– has high debtors of 165.09 days.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 273.93 and is trading at 299.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
