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For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Deccan Cements Limited (NSE:DECCANCE) useful as an attempt to give more color around how Deccan Cements is currently performing.
See our latest analysis for Deccan Cements
Could DECCANCE beat the long-term trend and outperform its industry?
DECCANCE's trailing twelve-month earnings (from 31 March 2019) of ₹461m has jumped 19% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 19%, indicating the rate at which DECCANCE is growing has accelerated. How has it been able to do this? Let's see whether it is merely attributable to an industry uplift, or if Deccan Cements has seen some company-specific growth.
In terms of returns from investment, Deccan Cements has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 8.7% exceeds the IN Basic Materials industry of 5.8%, indicating Deccan Cements has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Deccan Cements’s debt level, has declined over the past 3 years from 23% to 14%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Deccan Cements has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Deccan Cements 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 DECCANCE’s future growth? Take a look at our free research report of analyst consensus for DECCANCE’s outlook.
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Financial Health: Are DECCANCE’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.