How has been the historical performance of Quick Heal Tech?

Revenue and Operating Income Trends

Quick Heal Tech's net sales have experienced variability, peaking at ₹342 crores in the fiscal year ending March 2022 before declining to ₹280 crores by March 2025. The total operating income mirrors this pattern, with no other operating income reported across the years. The decline in sales post-2022 suggests market pressures or competitive challenges impacting top-line growth. Despite this, the company has maintained a consistent approach to managing raw material costs and purchases of finished goods, which have generally decreased in line with sales.

Cost Structure and Profitability

Employee costs have steadily increased from ₹99 crores in 2019 to ₹186 crores in 2025, indicating investment in human capital, possibly to support product development or sales efforts. Other expenses have also risen, reaching ₹93 crores in the latest fiscal year. These rising costs have contributed to a contraction in operating profit margins, which fell sharply from a robust 42.5% in 2021 to a negative margin of -2.4% in 2025 when excluding other income.

However, other income has provided some cushion, helping the company report a positive operating profit (PBDIT) of ₹14 crores in 2025, albeit significantly lower than the ₹166 crores recorded in 2021. Profit before tax and profit after tax have similarly declined, with PAT dropping from ₹107 crores in 2021 to just ₹5 crores in 2025. Earnings per share have followed this downward trend, falling from ₹16.66 in 2021 to ₹0.93 in 2025, reflecting the pressure on shareholder returns.

Balance Sheet and Asset Management

The company’s total assets have contracted from ₹827 crores in 2021 to ₹517 crores in 2025, reflecting a reduction in both current and non-current assets. Notably, net block assets have decreased from ₹146 crores to ₹84 crores over the same period, indicating possible asset sales or depreciation outpacing capital expenditure. Current investments have also declined substantially, from ₹383 crores in 2021 to ₹172 crores in 2025, which may impact liquidity and investment income.

Shareholders’ funds have similarly reduced from ₹751 crores in 2021 to ₹441 crores in 2025, with reserves declining in tandem. The company remains debt-free, with no long-term or short-term borrowings reported, which is a positive indicator of financial prudence. However, contingent liabilities have increased slightly to ₹7.9 crores in 2025, warranting monitoring.

Cash Flow and Liquidity

Cash flow from operating activities has turned negative in the latest fiscal year, recording an outflow of ₹22 crores compared to inflows in previous years. This shift is partly due to adverse changes in working capital, which saw a ₹29 crore outflow in 2025. Investing activities have generated positive cash flow recently, supported by asset sales or investment realisations, while financing activities have consistently been a cash outflow, reflecting repayments or dividend payments.

Closing cash and cash equivalents have decreased to ₹20 crores in 2025 from ₹37 crores in 2024, signalling tighter liquidity conditions. The company’s ability to manage cash flow effectively will be critical to sustaining operations and funding growth initiatives going forward.

Summary and Outlook

Over the past six years, Quick Heal Tech has demonstrated a mixed financial performance characterised by fluctuating revenues and declining profitability. The company’s operating margins and net profits have contracted significantly since their peaks in 2021, impacted by rising costs and softer sales. Despite maintaining a debt-free balance sheet, reductions in asset base and cash reserves highlight challenges in capital management and liquidity.

Investors should weigh these historical trends carefully, considering the company’s recent operational pressures and the competitive landscape in the software security sector. While the firm’s commitment to controlling debt and investing in its workforce is evident, the subdued earnings and cash flow metrics suggest a cautious approach until a clearer recovery trajectory emerges.

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