Impressive Earnings May Not Tell The Whole Story For Quick Heal Technologies (NSE:QUICKHEAL)

Despite announcing strong earnings, Quick Heal Technologies Limited's (NSE:QUICKHEAL) stock was sluggish. We think that the market might be paying attention to some underlying factors that they find to be concerning.

View our latest analysis for Quick Heal Technologies

The Impact Of Unusual Items On Profit

For anyone who wants to understand Quick Heal Technologies' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ₹140m worth of unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's as you'd expect, given these boosts are described as 'unusual'. We can see that Quick Heal Technologies' positive unusual items were quite significant relative to its profit in the year to September 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Quick Heal Technologies.

Our Take On Quick Heal Technologies' Profit Performance

As we discussed above, we think the significant positive unusual item makes Quick Heal Technologies' earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Quick Heal Technologies' underlying earnings power is lower than its statutory profit. The good news is that it earned a profit in the last twelve months, despite its previous loss. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. So while earnings quality is important, it's equally important to consider the risks facing Quick Heal Technologies at this point in time. To help with this, we've discovered 5 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in Quick Heal Technologies.

This note has only looked at a single factor that sheds light on the nature of Quick Heal Technologies' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.