In This Article:
In this commentary, I will examine Agro Tech Foods Limited’s (NSE:ATFL) latest earnings update (31 March 2018) and compare these figures against its performance over the past couple of years, as well as how the rest of the food industry performed. As an investor, I find it beneficial to assess ATFL’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
View our latest analysis for Agro Tech Foods
How Well Did ATFL Perform?
ATFL’s trailing twelve-month earnings (from 31 March 2018) of ₹316m has jumped 14% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -9.3%, indicating the rate at which ATFL is growing has accelerated. How has it been able to do this? Let’s see if it is solely attributable to an industry uplift, or if Agro Tech Foods has experienced some company-specific growth.
In terms of returns from investment, Agro Tech Foods has fallen short of achieving a 20% return on equity (ROE), recording 9.3% instead. However, its return on assets (ROA) of 7.1% exceeds the IN Food industry of 7.1%, indicating Agro Tech Foods has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Agro Tech Foods’s debt level, has declined over the past 3 years from 14% to 14%.
What does this mean?
Though Agro Tech Foods’s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There may be factors that are influencing the industry as a whole, thus the high industry growth rate over the same time period. You should continue to research Agro Tech Foods to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for ATFL’s future growth? Take a look at our free research report of analyst consensus for ATFL’s outlook.
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Financial Health: Are ATFL’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 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.