In This Article:
Today I will take a look at Balaji Amines Limited's (NSE:BALAMINES) most recent earnings update (31 March 2019) and compare these latest figures against its performance over the past few years, as well as how the rest of the chemicals industry performed. As an investor, I find it beneficial to assess BALAMINES’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
See our latest analysis for Balaji Amines
Did BALAMINES's recent earnings growth beat the long-term trend and the industry?
BALAMINES's trailing twelve-month earnings (from 31 March 2019) of ₹1.2b has increased by 3.5% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 27%, indicating the rate at which BALAMINES is growing has slowed down. To understand what's happening, let’s take a look at what’s occurring with margins and whether the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Balaji Amines has fallen short of achieving a 20% return on equity (ROE), recording 20% instead. However, its return on assets (ROA) of 12% exceeds the IN Chemicals industry of 8.8%, indicating Balaji Amines has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Balaji Amines’s debt level, has declined over the past 3 years from 27% to 24%.
What does this mean?
Balaji Amines's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Balaji Amines gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Balaji Amines to get a more holistic view of the stock by looking at:
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Financial Health: Are BALAMINES’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 BALAMINES 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 BALAMINES 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 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.