Examining how OCL Iron and Steel Limited (NSEI:OISL) 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 OCL Iron and Steel is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its metals and mining industry peers. View our latest analysis for OCL Iron and Steel
How Did OISL’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to analyze many different companies in a uniform manner using new information. For OCL Iron and Steel, its most recent bottom-line (trailing twelve month) is -₹2.37B, which, relative to the prior year’s figure, has become more negative. Since these figures may be somewhat short-term thinking, I’ve calculated an annualized five-year figure for OCL Iron and Steel’s net income, which stands at -₹502.03M. This doesn’t seem to paint a better picture, as earnings seem to have steadily been getting more and more negative over time.
We can further assess OCL Iron and Steel’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years OCL Iron and Steel’s top-line has grown by 11.08% on average, implying that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Looking at growth from a sector-level, the IN metals and mining industry has been growing its average earnings by double-digit 27.13% over the previous twelve months, and a less exciting 7.79% over the past five years. This shows that any tailwind the industry is benefiting from, OCL Iron and Steel has not been able to reap as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most insightful step is to assess company-specific issues OCL Iron and Steel may be facing and whether management guidance has steadily been met in the past. You should continue to research OCL Iron and Steel to get a better picture of the stock by looking at:
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1. Financial Health: Is OISL’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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2. Valuation: What is OISL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether OISL is currently mispriced by the market.
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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 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.