Examining how Berger Paints India Limited (NSE:BERGEPAINT) 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 Berger Paints India is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its chemicals industry peers.

Check out our latest analysis for Berger Paints India

Could BERGEPAINT beat the long-term trend and outperform its industry?

BERGEPAINT's trailing twelve-month earnings (from 30 June 2019) of ₹5.4b has jumped 12% 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 14%, indicating the rate at which BERGEPAINT is growing has slowed down. To understand what's happening, let's examine what's occurring with margins and whether the entire industry is feeling the heat.

In terms of returns from investment, Berger Paints India has invested its equity funds well leading to a 22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 13% exceeds the IN Chemicals industry of 8.7%, indicating Berger Paints India has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Berger Paints India’s debt level, has declined over the past 3 years from 33% to 29%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Berger Paints India to get a better picture of the stock by looking at:

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

2. Financial Health: Are BERGEPAINT’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 30 June 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.