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After reading Dhampur Sugar Mills Limited’s (NSEI:DHAMPURSUG) most recent earnings announcement (31 December 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. See our latest analysis for Dhampur Sugar Mills
How DHAMPURSUG fared against its long-term earnings performance and its industry
I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method enables me to assess different stocks on a similar basis, using the latest information. For Dhampur Sugar Mills, its most recent earnings (trailing twelve month) is ₹3.04B, which, relative to last year’s figure, has climbed up by 26.88%. Since these values may be relatively nearsighted, I’ve calculated an annualized five-year value for DHAMPURSUG’s earnings, which stands at ₹555.36M This suggests that, generally, Dhampur Sugar Mills has been able to consistently improve its bottom line over the past couple of years as well.
How has it been able to do this? Let’s take a look at if it is only a result of an industry uplift, or if Dhampur Sugar Mills has experienced some company-specific growth. In the last couple of years, Dhampur Sugar Mills increased its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Viewing growth from a sector-level, the IN food industry has been growing its average earnings by double-digit 22.25% over the prior twelve months, and 15.06% over the last five years. This shows that any tailwind the industry is deriving benefit from, Dhampur Sugar Mills is able to amplify this to its advantage.
What does this mean?
Dhampur Sugar Mills’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Dhampur Sugar Mills gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Dhampur Sugar Mills to get a better picture of the stock by looking at: