How has been the historical performance of QMS Medical?

Revenue and Profitability Growth

In the fiscal year ending March 2025, QMS Medical reported consolidated net sales of ₹156.01 crores, reflecting a robust increase from ₹122.13 crores in the previous year. This growth of approximately 27.7% underscores the company’s expanding market presence and operational scale. The total operating income mirrored this trend, with no other operating income recorded in either year, indicating that core business activities drove revenue growth.

Despite a slight reduction in the purchase of finished goods from ₹87.58 crores to ₹81.26 crores, the company managed to increase its employee costs significantly, from ₹5.50 crores to ₹9.58 crores, suggesting investment in human capital to support growth. Other expenses also rose sharply to ₹39.42 crores from ₹18.36 crores, which may reflect increased operational activities or strategic initiatives.

Consequently, total expenditure excluding depreciation increased to ₹130.60 crores from ₹103.78 crores. However, QMS Medical’s operating profit before depreciation, interest, and tax (PBDIT) excluding other income improved markedly to ₹25.41 crores, up from ₹18.35 crores, with the operating profit margin rising to 16.29% from 15.02%. Including other income, operating profit reached ₹27.13 crores, a significant jump from ₹18.81 crores the prior year.

Profitability and Margins

Interest expenses rose to ₹4.64 crores from ₹3.13 crores, reflecting increased borrowings, yet the company maintained a healthy gross profit before tax of ₹22.49 crores, up from ₹15.68 crores. Depreciation expenses were relatively stable, increasing slightly to ₹3.83 crores.

Profit before tax surged to ₹18.66 crores from ₹12.24 crores, while the effective tax outgo increased to ₹4.96 crores. The net profit after tax improved substantially to ₹13.70 crores from ₹9.00 crores, with consolidated net profit rising to ₹12.09 crores. This translated into an earnings per share (EPS) increase to ₹6.7 from ₹5.04, highlighting enhanced shareholder returns.

Margins also improved, with the PAT margin rising to 8.78% from 7.37%, indicating better cost management and operational efficiency despite higher expenses.

Balance Sheet Strength and Asset Growth

QMS Medical’s balance sheet exhibited considerable strengthening. Shareholders’ funds increased to ₹89.71 crores from ₹78.51 crores, supported by reserves growing to ₹71.86 crores. The company’s total liabilities expanded to ₹189.79 crores from ₹135.32 crores, driven largely by a rise in both short-term borrowings to ₹50.85 crores and long-term borrowings to ₹9.44 crores, reflecting increased leverage to fund growth.

On the asset side, total assets rose significantly to ₹189.79 crores from ₹135.32 crores. Notably, net block assets more than doubled to ₹52.68 crores, indicating capital expenditure and asset acquisition. Intangible assets under development also increased, signalling ongoing investments in innovation or technology. Current assets grew to ₹120.03 crores, with improvements in sundry debtors and other current assets, although net current assets slightly declined due to higher current liabilities.

Cash Flow and Financial Position

Cash flow from operating activities showed a marked improvement, rising to ₹20.00 crores from ₹1.00 crore, supported by positive changes in working capital. However, cash flow from investing activities was negative at ₹45.00 crores, reflecting significant capital investments. Financing activities contributed ₹25.00 crores, indicating fresh borrowings or capital infusion to support expansion. Despite these movements, the company maintained a neutral net cash inflow/outflow position, with closing cash and cash equivalents reported at zero.

Summary of Historical Performance

Overall, QMS Medical has exhibited strong financial performance over the last fiscal year, with significant revenue growth, improved profitability, and a solid balance sheet expansion. The company’s operating and net profit margins have improved, reflecting effective cost control and operational leverage. Increased borrowings have been utilised to fund capital expenditure and growth initiatives, positioning the company for continued expansion.

While the rise in expenses and borrowings warrants monitoring, the company’s enhanced earnings per share and reserves growth indicate a positive trajectory. Investors may find QMS Medical’s financial health and growth prospects encouraging, especially given its ability to generate improved cash flows from operations despite substantial investments.

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