For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Just Dial Limited’s (NSEI:JUSTDIAL) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for Just Dial

Were JUSTDIAL’s earnings stronger than its past performances and the industry?

To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to analyze various companies on a similar basis, using the most relevant data points. For Just Dial, its most recent trailing-twelve-month earnings is ₹1.43B, which compared to the prior year’s level, has jumped up by 18.00%. Since these figures are somewhat short-term, I have determined an annualized five-year figure for JUSTDIAL’s net income, which stands at ₹1.10B This shows that, on average, Just Dial has been able to increasingly improve its profits over the past couple of years as well.

How has it been able to do this? Let’s see if it is solely owing to an industry uplift, or if Just Dial has seen some company-specific growth. The ascend in earnings seems to be driven by a substantial top-line increase outpacing its growth rate of expenses. Though this has caused a margin contraction, it has made Just Dial more profitable. Inspecting growth from a sector-level, the IN internet industry has been growing its average earnings by double-digit 21.88% in the past year, and 24.47% over the last five years. This suggests that whatever uplift the industry is profiting from, Just Dial has not been able to realize the gains unlike its average peer.

What does this mean?

Though Just Dial’s past data is helpful, it is only one aspect of my investment thesis. While Just Dial has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Just Dial to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for JUSTDIAL’s future growth? Take a look at our free research report of analyst consensus for JUSTDIAL’s outlook.

2. Financial Health: Is JUSTDIAL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.