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Understanding how Godrej Consumer Products Limited (NSEI:GODREJCP) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Godrej Consumer Products is doing by comparing its latest earnings with its long-term trend as well as the performance of its personal products industry peers. View our latest analysis for Godrej Consumer Products
Were GODREJCP’s earnings stronger than its past performances and the industry?
I look at 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 enables me to assess different stocks on a similar basis, using the most relevant data points. For Godrej Consumer Products, its latest trailing-twelve-month earnings is ₹14.05B, which, relative to the previous year’s level, has increased by a relatively subdued 5.54%. Since these figures are fairly short-term, I have determined an annualized five-year value for Godrej Consumer Products’s earnings, which stands at ₹9.27B This means generally, Godrej Consumer Products has been able to steadily grow its net income over the past few years as well.
What’s the driver of this growth? Let’s see whether it is solely owing to industry tailwinds, or if Godrej Consumer Products has seen some company-specific growth. Over the last few years, Godrej Consumer Products increased its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Viewing growth from a sector-level, the IN personal products industry has been growing, albeit, at a unexciting single-digit rate of 5.54% over the past year, and a substantial 12.93% over the previous five years. This means that any uplift the industry is deriving benefit from, Godrej Consumer Products is capable of amplifying this to its advantage.
What does this mean?
Godrej Consumer Products’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Godrej Consumer Products gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Godrej Consumer Products to get a better picture of the stock by looking at:
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1. Future Outlook: What are well-informed industry analysts predicting for GODREJCP’s future growth? Take a look at our free research report of analyst consensus for GODREJCP’s outlook.
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2. Financial Health: Is GODREJCP’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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3. 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 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.