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Check Before You Invest : Quality Power Electrical Equipments Ltd

BSE: 544367 NSE: QPOWER ISIN: INE0SII01026
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Electric Equipment

Snapshot

Q.1 Which industry/sub-sector does Quality Power Electrical Equipments Ltd belong to?
Quality Power Electrical Equipments Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Electric Equipment segment.
Q.2 Is Quality Power Electrical Equipments Ltd a good quality company?
Quality Power Electrical Equipments Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Quality Power Electrical Equipments Ltd undervalued or overvalued?
Quality Power Electrical Equipments Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 3-year
Historic Median
Price to Earnings 209.33 153.24
Price to Book 26.47 16.62
Price to Sales 50.28 32.87
EV to EBITDA 150.6 103.89
Q.4 Is Quality Power Electrical Equipments Ltd a good buy now?
Quality Power Electrical Equipments Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Quality Power Electrical Equipments Ltd?
Quality Power Electrical Equipments Ltd revenue growth is 17.6% for FY-2025, which is below its 3-year CAGR of 28.26%, indicating slower growth.

Q.2 Gross Profit margin of Quality Power Electrical Equipments Ltd?
Quality Power Electrical Equipments Ltd Gross profit margin which is the profit after deduction of direct costs, is 27.2% for FY-2025, which is above its 3-year median of 20.7%, indicating increasing margins.

Q.3 Operating Profit Margin of Quality Power Electrical Equipments Ltd?
Quality Power Electrical Equipments Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 25.94% for FY-2025, which is above its 3-year median of 18.18% indicating increasing margins.

Q.4 Net Profit Margin of Quality Power Electrical Equipments Ltd?
Quality Power Electrical Equipments Ltd Net Profit Margin is 19.89% for FY-2025, is above its 3-year median of 14.18%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 27.2 20.7
Operating Profit Margin (%) 25.94 18.18
Net Profit Margin (%) 19.89 14.18

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Quality Power Electrical Equipments Ltd?
Quality Power Electrical Equipments Ltd Return on Asset is 12.18%, which is below its 3-year historical median of 14.13%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Quality Power Electrical Equipments Ltd?
Quality Power Electrical Equipments Ltd Return on capital employed is 17.92% for FY-2025, which is below its 3-year historical median of 24.32%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Quality Power Electrical Equipments Ltd?
Quality Power Electrical Equipments Ltd Return on equity is 14.19% for FY-2025, which is below its 3-year historical median of 19.31%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Quality Power Electrical Equipments Ltd?
Quality Power Electrical Equipments Ltd Cash conversion cycle is 39 days, in line with its 3-year historical median of 39 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 0.61 1
ROE (%) 14.19 19.31
ROCE (%) 17.92 24.32
Cash Conversion Cycle 39 days 39 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Quality Power Electrical Equipments Ltd?
Quality Power Electrical Equipments Ltd Debt-to-Equity ratio is 0.02, which is lower the industry average of 0.29, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Quality Power Electrical Equipments Ltd?
Quality Power Electrical Equipments Ltd Debt to cash flow from operations is 0.29, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Quality Power Electrical Equipments Ltd?

Q.1 Promoter shareholding and pledge status of Quality Power Electrical Equipments Ltd?
Promoters hold 73.91% of the Quality Power Electrical Equipments Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Quality Power Electrical Equipments Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Quality Power Electrical Equipments Ltd vs industry peers?
Quality Power Electrical Equipments Ltd revenue CAGR is 28.26%, compared to the industry median CAGR of 22.95%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) 17.6 23
Gross Profit Growth (%) 57.7 39.5
Operating Profit Growth (%) 73.9 42.8
Net Profit Growth (%) 66.7 44.2
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 0.61 1.19
ROE (%) 14.19 14.65
ROCE (%) 17.92 17.34
Cash Conversion Cycle (days) 39.15 87

Valuation & price assessment

Q.1 Stock return of Quality Power Electrical Equipments Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of 268.65% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - 268.7%
Q.2 Valuation ratios of Quality Power Electrical Equipments Ltd vs historical?
The current P/E ratio of 209.33 is higher than its historical median of 153.24, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 209.33 153.24 43.78
Price to Book 26.47 16.62 4.74
Price to Sales 50.28 32.87 3.09
EV to EBITDA 150.6 103.89 21.60

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