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When Dixon Technologies (India) Limited (NSEI:DIXON) announced its most recent earnings (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Dixon Technologies (India) has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see DIXON has performed. Check out our latest analysis for Dixon Technologies (India)
How DIXON fared against its long-term earnings performance and its industry
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to analyze different stocks on a more comparable basis, using the latest information. For Dixon Technologies (India), its latest earnings (trailing twelve month) is IN₨571.36M, which compared to last year’s level, has moved up by 24.34%. Since these values are relatively nearsighted, I’ve estimated an annualized five-year value for Dixon Technologies (India)’s net income, which stands at IN₨301.57M This means that, generally, Dixon Technologies (India) has been able to consistently raise its bottom line over the past couple of years as well.
How has it been able to do this? Well, let’s take a look at whether it is only attributable to industry tailwinds, or if Dixon Technologies (India) has experienced some company-specific growth. Over the past few years, Dixon Technologies (India) expanded its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Scanning growth from a sector-level, the IN consumer durables industry has been growing its average earnings by double-digit 13.70% over the past year, and 13.71% over the previous five years. This means whatever tailwind the industry is profiting from, Dixon Technologies (India) is able to amplify this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Dixon Technologies (India) 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 Dixon Technologies (India) to get a better picture of the stock by looking at: