Revenue & Profitability: Quality Enviro's performance has been underwhelming in FY24. While the company's revenue deteriorated by approximately ~ 19%, from ₹49.9 Cr. to ₹40.2 Cr., the company improved its Net Profit by 9.2%, from ₹2.6 Cr. to ₹2.8 Cr. while the NPM grew by 2%, from 5% in FY23 to 7% in FY24 respectively owing to a reduction in Interest Expenses.

Earnings Per Share: Due to an improvement in Net Profit, the company also had a hike of 9% in EPS recording an EPS of ₹32.77 in FY24 compared to ₹30.02 in FY23.

Total Assets: Quality Enviro also reported a decline in its Total Assets which declined 7%, from ₹35.2 Cr. in FY23 to ₹32.8 Cr. in FY24 respectively. While the company has not focused much on expansion as its Net PP&E remained constant, the company's Total inventory reduced sharply by 60%, from ₹3.9 Cr. to ₹1.6 Cr.

Valuation: The company seems to be undervalued, recording a P/E of 36.6x compared to the 5-year industry median P/E of 24.4x, indicating the overvalued nature of the stock.

Rating: Keeping the undervalued nature of the stock but the underperforming financials of the company in mind, we advise selling this stock.

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