Examining HSIL Limited's (NSE:HSIL) 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 HSIL's latest performance announced on 31 March 2019 and compare these figures to its longer term trend and industry movements.

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See our latest analysis for HSIL

Was HSIL weak performance lately part of a long-term decline?

HSIL's trailing twelve-month earnings (from 31 March 2019) of ₹700m has declined by -5.5% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 5.0%, indicating the rate at which HSIL is growing has slowed down. What could be happening here? Let's examine what's occurring with margins and whether the whole industry is facing the same headwind.

In terms of returns from investment, HSIL has fallen short of achieving a 20% return on equity (ROE), recording 4.6% instead. Furthermore, its return on assets (ROA) of 4.4% is below the IN Building industry of 6.4%, indicating HSIL's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for HSIL’s debt level, has declined over the past 3 years from 11% to 7.7%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Typically companies that experience a drawn out period of reduction in earnings are undergoing some sort of reinvestment phase with the aim of keeping up with the recent industry expansion and disruption. I suggest you continue to research HSIL to get a better picture of the stock by looking at:

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

2. Financial Health: Are HSIL’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 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.