Measuring Gujarat NRE Coke Limited’s (NSEI:GUJNRECOKE) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess GUJNRECOKE’s recent performance announced on 31 March 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for Gujarat NRE Coke
How Did GUJNRECOKE’s Recent Performance Stack Up Against Its Past?
I look at the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method allows me to analyze different companies on a similar basis, using the latest information. For Gujarat NRE Coke, its most recent bottom-line (trailing twelve month) is -₹7.34B, which, relative to the previous year’s figure, has become less negative. Since these values are somewhat myopic, I have calculated an annualized five-year figure for GUJNRECOKE’s net income, which stands at -₹3.38B. This means Gujarat NRE Coke has historically performed better than recently, even though it seems like earnings are now heading back towards to right direction again.
We can further analyze Gujarat NRE Coke’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Gujarat NRE Coke has seen an annual decline in revenue of -22.15%, 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 metals and mining industry has been growing its average earnings by double-digit 27.16% over the prior twelve months, and a more subdued 4.93% over the last five years. This means that whatever uplift the industry is profiting from, Gujarat NRE Coke 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 hard to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues Gujarat NRE Coke may be facing and whether management guidance has regularly been met in the past. You should continue to research Gujarat NRE Coke to get a more holistic view of the stock by looking at: