Quick Heal Technologies Ltd
Pune based IT Security Solutions company, established in the year 1995. Each Quick Heal product is designed to simplify IT security management across the length and depth of devices and on multiple platforms. They are customized to suit consumers, small businesses, Government establishments and corporate houses.
Quick Heal enjoys an active license user base of more than 7 million. This equates to 30% market share of Antivirus companies in India. Quick Heal has its presence globally in 31 countries via effective partnership program. As of now approximately 90% of the Global Antivirus solutions market share is captured by big players like Microsoft, Avast, AVG, Symantec, McAfee etc.
Increasing internet security threats from malware, virus & Trojans indicates, massive opportunity ahead for the expansion of complex antivirus solutions business. Increased usage of internet in mobiles, tablets, and PCs by Indians, suggests the future market potential of the underlying business.
Quick heal Security not simplified
However when we examine the Balance Sheet its evident that the company Profit is declining over the years. Because of the competition Operating margin is under pressure and profitability of the business is going down. Earning per share and Dividend rate are also in declining phase.
As per the Draft, Red Herring Prospectus (DHRP) filed with SEBI, company claims to use the majority of the Initial Public Offering (IPO) amount on advertising, sales promotion, capital expenditure and renovation. Personally, I am not convinced about using the raised fund for noncore activity. Low priced, free antivirus tools are penetrating the market and can directly affect the business model of the Quick Heal.
Quick Heal is it unique IPO?
IPO closed on 10th February 2016. Even though it’s a unique IPO as there are no listed peers, on the listing day stock price plummeted more than 20%. Few people may tag Bear market IPO as a reason for the crash and it’s a great opportunity to buy in truck loads. Around the world technology related stock prices are being the de-rated and recent example from Indian context is Just Dial whose share price crashed in the jiffy from high of Rs.1895 to low of 376.
The company has corporate governance issues. Preceding fiscal years its subsidiaries have incurred losses which can negatively affect the financial conditions. Even at the current market price of Rs.253 stock appears overvalued to me. Always take the calculated risk and never try to make money in a brisk.
Information presented in the above article is available in public domain and it should not be treated as “Research Report”
Registration Status: I am not a SEBI registered Research Analyst.
As per SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014 and clarifications provided by SEBI
“Any person who makes the recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.”
Disclaimer: I do not hold any position in QUICKHEAL.