After looking at Eurotex Industries and Exports Limited’s (NSEI:EUROTEXIND) latest earnings announcement (30 June 2017), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Eurotex Industries and Exports’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. Check out our latest analysis for Eurotex Industries and Exports
Commentary On EUROTEXIND’s Past Performance
I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method allows me to assess different companies on a similar basis, using the most relevant data points. For Eurotex Industries and Exports, the most recent twelve-month earnings -₹95.9M, which, against the prior year’s level, has become less negative. Given that these values are somewhat myopic, I’ve created an annualized five-year value for Eurotex Industries and Exports’s net income, which stands at -₹4.3M. This suggests that, Eurotex Industries and Exports has historically performed better than recently, though it seems like earnings are now heading back in the right direction again.
We can further analyze Eurotex Industries and Exports’s loss by researching what has been happening in the industry on top of within the company. Initially, I want to quickly look into the line items. Revenue growth over last few years has been relatively soft, remaining flat on average at -1.89%. Given that top-line growth is also pretty stale the key to profitability in the future would be controlling costs. Scanning growth from a sector-level, the IN luxury industry has been growing, albeit, at a subdued single-digit rate of 3.81% over the prior year, and 5.76% over the previous five years. This suggests that whatever near-term headwind the industry is enduring, Eurotex Industries and Exports is less exposed compared to its peers.
What does this mean?
Eurotex Industries and Exports’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most insightful step is to examine company-specific issues Eurotex Industries and Exports may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Eurotex Industries and Exports to get a more holistic view of the stock by looking at: