In this article, I will take a look at Dev Information Technology Limited's (NSEI:DEVIT) most recent earnings update (31 March 2019) and compare these latest figures against its performance over the past few years, along with how the rest of DEVIT'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 Dev Information Technology
Could DEVIT beat the long-term trend and outperform its industry?
DEVIT's trailing twelve-month earnings (from 31 March 2019) of ₹44m has jumped 14% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 27%, indicating the rate at which DEVIT is growing has slowed down. To understand what's happening, let's look at what's going on with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, Dev Information Technology has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 9.6% exceeds the IN IT industry of 9.2%, indicating Dev Information Technology has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Dev Information Technology’s debt level, has declined over the past 3 years from 30% to 23%.
What does this mean?
Though Dev Information Technology's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Dev Information Technology 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 DEVIT’s future growth? Take a look at our free research report of analyst consensus for DEVIT’s outlook.
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Financial Health: Are DEVIT’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.
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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.