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Assessing The United Nilgiri Tea Estates Company Limited’s (NSEI:UNITEDTEA) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess UNITEDTEA’s recent performance announced on 31 March 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for United Nilgiri Tea Estates
Was UNITEDTEA’s weak performance lately a part of a long-term decline?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 method enables me to analyze various companies on a more comparable basis, using the most relevant data points. For United Nilgiri Tea Estates, its latest trailing-twelve-month earnings is ₹86.69M, which, against last year’s figure, has plunged by -15.23%. Since these figures are somewhat short-term thinking, I’ve created an annualized five-year value for UNITEDTEA’s earnings, which stands at ₹76.28M This suggests that though earnings growth was negative from the previous year, over a longer period of time, United Nilgiri Tea Estates’s earnings have been growing on average.
What’s enabled this growth? Let’s see whether it is solely attributable to an industry uplift, or if United Nilgiri Tea Estates has experienced some company-specific growth. Over the last couple of years, United Nilgiri Tea Estates grew its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the IN food industry has been growing its average earnings by double-digit 26.88% in the previous twelve months, and 16.86% over the last five years. This suggests that whatever uplift the industry is profiting from, United Nilgiri Tea Estates has not been able to gain as much as its industry peers.
What does this mean?
United Nilgiri Tea Estates’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. You should continue to research United Nilgiri Tea Estates to get a better picture of the stock by looking at: