In This Article:
Understanding how Som Distilleries & Breweries Limited (NSE:SDBL) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Som Distilleries & Breweries is doing by comparing its latest earnings with its long-term trend as well as the performance of its beverage industry peers.
See our latest analysis for Som Distilleries & Breweries
Did SDBL perform worse than its track record and industry?
SDBL's trailing twelve-month earnings (from 30 June 2019) of ₹231m has declined by -12% 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 8.6%, indicating the rate at which SDBL is growing has slowed down. What could be happening here? Let's examine what's occurring with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, Som Distilleries & Breweries has fallen short of achieving a 20% return on equity (ROE), recording 7.4% instead. Furthermore, its return on assets (ROA) of 5.4% is below the IN Beverage industry of 7.7%, indicating Som Distilleries & Breweries's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Som Distilleries & Breweries’s debt level, has declined over the past 3 years from 18% to 12%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 5.4% to 48% over the past 5 years.
What does this mean?
Though Som Distilleries & Breweries's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Som Distilleries & Breweries 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 SDBL’s future growth? Take a look at our free research report of analyst consensus for SDBL’s outlook.
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Financial Health: Are SDBL’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 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.