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Examining Kesoram Industries Limited’s (NSEI:KESORAMIND) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess KESORAMIND’s latest performance announced on 31 March 2017 and weight these figures against its longer term trend and industry movements. See our latest analysis for Kesoram Industries

Did KESORAMIND perform worse than its track record and industry?

I prefer to use the ‘latest twelve-month’ data, 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 method allows me to examine different stocks on a similar basis, using the latest information. For Kesoram Industries, its most recent bottom-line (trailing twelve month) is -₹2.30B, which, in comparison to the prior year’s level, has become more negative. Given that these figures may be somewhat short-term, I have calculated an annualized five-year value for Kesoram Industries’s earnings, which stands at -₹3.33B. This means even though net income is negative, it has become less negative over the years.

We can further assess Kesoram Industries’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Kesoram Industries has seen an annual decline in revenue of -6.79%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the IN auto components industry has been growing its average earnings by double-digit 12.02% over the previous year, and 11.13% over the past five years. This means that whatever tailwind the industry is profiting from, Kesoram Industries has not been able to leverage it as much as its average peer.

What does this mean?

While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most valuable step is to assess company-specific issues Kesoram Industries may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Kesoram Industries to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is KESORAMIND’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.

• 2. Valuation: What is KESORAMIND worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether KESORAMIND is currently mispriced by the market.

• 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 March 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.