Today I will examine Bandhan Bank Limited’s (NSEI:BANDHANBNK) latest earnings update (31 December 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of BANDHANBNK’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for Bandhan Bank

How Well Did BANDHANBNK Perform?

I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method allows me to assess many different companies in a uniform manner using the latest information. For Bandhan Bank, its most recent bottom-line (trailing twelve month) is ₹12.80B, which compared to the previous year’s figure, has jumped up by 41.35%. Given that these values may be fairly nearsighted, I have computed an annualized five-year value for BANDHANBNK’s net income, which stands at ₹6.67B This suggests that, on average, Bandhan Bank has been able to consistently improve its bottom line over the last few years as well.

What’s enabled this growth? Let’s see whether it is merely because of an industry uplift, or if Bandhan Bank has seen some company-specific growth. Over the past few years, Bandhan Bank expanded its bottom line faster than revenue by successfully controlling its costs. This brought about a margin expansion and profitability over time. Scanning growth from a sector-level, the IN banks industry has been growing its average earnings by double-digit 10.02% over the prior year, and a flatter 0.55% over the past five years. This suggests that any tailwind the industry is benefiting from, Bandhan Bank is able to amplify this to its advantage.

What does this mean?

Bandhan Bank’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Bandhan Bank to get a better picture of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for BANDHANBNK’s future growth? Take a look at our free research report of analyst consensus for BANDHANBNK’s outlook.

• 2. Financial Health: Is BANDHANBNK’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.

• 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 December 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.