In This Article:
Examining Bharat Electronics Limited’s (NSE:BEL) 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 BEL’s latest performance announced on 31 March 2018 and compare these figures to its longer term trend and industry movements.
Check out our latest analysis for Bharat Electronics
Despite a decline, did BEL underperform the long-term trend and the industry?
BEL’s trailing twelve-month earnings (from 31 March 2018) of ₹14b has declined by -6.0% 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 10%, indicating the rate at which BEL is growing has slowed down. Why is this? Well, let’s take a look at what’s going on with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, Bharat Electronics has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 6.7% exceeds the IN Aerospace & Defense industry of 4.5%, indicating Bharat Electronics has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Bharat Electronics’s debt level, has increased over the past 3 years from 12% to 19%.
What does this mean?
Bharat Electronics’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. You should continue to research Bharat Electronics 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 BEL’s future growth? Take a look at our free research report of analyst consensus for BEL’s outlook.
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Financial Health: Are BEL’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.