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Understanding Aarti Industries Limited's (NSE:AARTIIND) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Aarti Industries is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period.
View our latest analysis for Aarti Industries
How Did AARTIIND's Recent Performance Stack Up Against Its Past?
AARTIIND's trailing twelve-month earnings (from 31 March 2019) of ₹4.8b has jumped 45% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 20%, indicating the rate at which AARTIIND is growing has accelerated. What's enabled this growth? Well, let’s take a look at whether it is only attributable to an industry uplift, or if Aarti Industries has seen some company-specific growth.
In terms of returns from investment, Aarti Industries has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 11% exceeds the IN Chemicals industry of 9.1%, indicating Aarti Industries has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Aarti Industries’s debt level, has declined over the past 3 years from 26% to 19%.
What does this mean?
Though Aarti Industries's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Aarti Industries gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Aarti Industries 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 AARTIIND’s future growth? Take a look at our free research report of analyst consensus for AARTIIND’s outlook.
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Financial Health: Are AARTIIND’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 31 March 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.