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When The State Trading Corporation of India Limited (NSEI:STCINDIA) released its most recent earnings update (31 March 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how State Trading of India performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see STCINDIA has performed. View our latest analysis for State Trading of India
How Did STCINDIA’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine many different companies on a more comparable basis, using the most relevant data points. For State Trading of India, its most recent trailing-twelve-month earnings is -₹7.28B, which, against the previous year’s level, has become more negative. Given that these figures are fairly myopic, I’ve computed an annualized five-year figure for STCINDIA’s earnings, which stands at -₹4.41B. This doesn’t seem to paint a better picture, since earnings seem to have gradually been getting more and more negative over time.
We can further examine State Trading of India’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade State Trading of India has seen an annual decline in revenue of -17.52%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the IN trade distributors industry has been growing, albeit, at a unexciting single-digit rate of 3.75% over the prior year, and 4.88% over the past five. This means that any recent headwind the industry is facing, it’s hitting State Trading of India harder than its peers.
What does this mean?
State Trading of India’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to envisage what will happen in the future and when. The most useful step is to examine company-specific issues State Trading of India may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research State Trading of India to get a better picture of the stock by looking at: