Examining how Mandhana Industries Limited (NSEI:MANDHANA) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Mandhana Industries is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its luxury industry peers. Check out our latest analysis for Mandhana Industries
Commentary On MANDHANA’s Past Performance
I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to examine many different companies in a uniform manner using the latest information. For Mandhana Industries, its latest trailing-twelve-month earnings is -₹8.17B, which, relative to the previous year’s level, has become more negative. Since these figures may be fairly myopic, I have computed an annualized five-year value for MANDHANA’s net income, which stands at -₹904.66M. This doesn’t seem to paint a better picture, since earnings seem to have consistently been getting more and more negative over time.
We can further examine Mandhana Industries’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Mandhana Industries has seen an annual decline in revenue of -3.33%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the IN luxury industry has been growing, albeit, at a unexciting single-digit rate of 5.55% in the previous twelve months, and a substantial 12.84% over the previous five years. This means whatever uplift the industry is enjoying, Mandhana Industries has not been able to leverage it as much as its industry peers.
What does this mean?
Though Mandhana Industries’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most insightful step is to examine company-specific issues Mandhana Industries may be facing and whether management guidance has dependably been met in the past. You should continue to research Mandhana Industries to get a more holistic view of the stock by looking at:
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Financial Health: Is MANDHANA’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.
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Valuation: What is MANDHANA worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MANDHANA is currently mispriced by the market.
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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 December 2017. 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.