Was Ajmera Realty Infra India Limited's (NSE:AJMERA) Earnings Decline Part Of A Broader Industry Downturn?
When Ajmera Realty & Infra India Limited (NSE:AJMERA) announced its most recent earnings (30 June 2019), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Ajmera Realty & Infra India performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see AJMERA has performed.
See our latest analysis for Ajmera Realty & Infra India
How Well Did AJMERA Perform?
AJMERA's trailing twelve-month earnings (from 30 June 2019) of ₹731m has declined by -9.3% 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 27%, indicating the rate at which AJMERA is growing has slowed down. What could be happening here? Let's examine what's transpiring with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, Ajmera Realty & Infra India has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. However, its return on assets (ROA) of 7.4% exceeds the IN Real Estate industry of 3.5%, indicating Ajmera Realty & Infra India has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Ajmera Realty & Infra India’s debt level, has increased over the past 3 years from 7.6% to 8.0%.
What does this mean?
Though Ajmera Realty & Infra India's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. You should continue to research Ajmera Realty & Infra India to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for AJMERA’s future growth? Take a look at our free research report of analyst consensus for AJMERA’s outlook.
Financial Health: Are AJMERA’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.
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 30 June 2019. This may not be consistent with full year annual report figures.
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