In This Article:
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Bajaj Electricals Limited’s (NSE:BAJAJELEC) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
View our latest analysis for Bajaj Electricals
Was BAJAJELEC’s recent earnings decline indicative of a tough track record?
BAJAJELEC’s trailing twelve-month earnings (from 31 March 2018) of ₹836m has declined by -18% 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 48%, indicating the rate at which BAJAJELEC is growing has slowed down. Why could this be happening? Well, let’s look at what’s occurring with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, Bajaj Electricals has fallen short of achieving a 20% return on equity (ROE), recording 8.9% instead. Furthermore, its return on assets (ROA) of 2.7% is below the IN Consumer Durables industry of 6.8%, indicating Bajaj Electricals’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Bajaj Electricals’s debt level, has increased over the past 3 years from 6.7% to 26%.
What does this mean?
Though Bajaj Electricals’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. I recommend you continue to research Bajaj Electricals to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for BAJAJELEC’s future growth? Take a look at our free research report of analyst consensus for BAJAJELEC’s outlook.
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Financial Health: Are BAJAJELEC’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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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 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.