Shares of Quality Power Electrical Equipments Limited fell 6.35% or ₹77.20 to ₹1,138.80 on the NSE on May 14, making it one of the top losers on the exchange, even as the company reported strong year-on-year growth in both revenue and profit for Q4 FY26. The stock touched an intraday low of ₹1,096.20 against a previous close of ₹1,216, with market capitalisation at approximately ₹8,891 crore. The trailing P/E ratio is 82.50 — a premium valuation that leaves the stock vulnerable to any disappointment in operational metrics. Average daily volume is 12.9 lakh shares.
All figures converted from ₹ millions to crore (dividing by 10).
What did Quality Power report in Q4 FY26?
On a standalone basis, revenue from operations rose 60.3% year-on-year to ₹70.89 crore from ₹44.23 crore in Q4 FY25. Standalone net profit grew 93.7% to ₹16.48 crore from ₹8.51 crore. Full-year standalone revenue stood at ₹221.91 crore versus ₹152.43 crore in FY25, with full-year standalone net profit at ₹54.87 crore versus ₹30.31 crore.
On a consolidated basis — which includes the acquired Mehru Electrical and Mechanical Engineers and Turkish subsidiary Endoks Enerji — Q4 FY26 revenue from operations surged 159.2% year-on-year to ₹280.81 crore from ₹108.32 crore. Consolidated net profit rose 65.7% to ₹50.55 crore from ₹30.50 crore. Full-year consolidated revenue reached ₹947.27 crore versus ₹338.27 crore, with net profit of ₹185.55 crore versus ₹100.15 crore. Consolidated basic EPS for FY26 stood at ₹15.67 versus ₹9.10 in FY25.
Why is the stock falling despite strong results?
The market is focused on the consolidated EBITDA margin, which contracted to 10.79% in Q4 FY26 from 15.10% in Q4 FY25 — a 431 basis point deterioration despite a 159% surge in revenue. The absolute EBITDA nearly doubled to ₹30.3 crore from ₹16.3 crore, but the margin compression signals that the larger consolidated entity is operating at lower profitability than the standalone business — a concern for a stock trading at 82.50x trailing earnings.
A second drag is the Turkish subsidiary Endoks Enerji, which recorded a net monetary loss of ₹25.74 crore due to the impact of hyper-inflation accounting under Ind AS 29. Turkey’s hyper-inflationary economy requires companies to restate financial statements, and the resulting monetary loss flows through the P&L under other expenses — adding a visible and recurring drag on consolidated profitability that investors at a premium valuation find uncomfortable.
Key positives the market may be overlooking
The company highlighted several structurally positive developments. The order book stands at approximately ₹1,400 crore — a strong demand visibility indicator. Mehru Electrical’s integration has been successful, with EBITDA margins improving to approximately 20% in Q4 and approximately 15% within one year of acquisition. The company’s ₹17.2 crore Mehru expansion capex includes GIS component production and high-voltage testing equipment, and Mehru plans to develop its first 765 kV equipment over the coming quarters — a significant capability upgrade.
The Sangli Plant is expected to commence production in the first week of August 2026, and the HVDC CTC Magnet Wire Facility is on track for Q3 FY27 commissioning. Endoks is establishing a new Power Conversion System facility in Turkey targeting Battery Energy Storage System orders with a $2 million first-phase capex.
Capital raising and corporate actions
The board approved enabling authorisation to raise up to USD 75 million in one or more tranches through equity, QIP, preferential issue, debt securities, or foreign currency borrowings — providing strategic capital for international expansion, acquisitions, and capacity augmentation. Promoters have voluntarily waived their dividend entitlement to conserve cash in light of the fundraising plans. The board also approved in-principle the merger of wholly owned subsidiary S&S Transformers & Accessories with the company for operational efficiency. The proposed Veeral Controls acquisition has been kept in abeyance pending fulfilment of conditions precedent by the sellers.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to consult a registered financial advisor before making any investment decisions. Business Upturn does not hold any position in the securities mentioned.