Examining how AVSL Industries Limited (NSE:AVSL) is performing as a company requires looking at more than just a years' earnings. Below, I will run you through a simple sense check to build perspective on how AVSL Industries is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its chemicals industry peers.

View our latest analysis for AVSL Industries

Did AVSL's recent earnings growth beat the long-term trend and the industry?

AVSL's trailing twelve-month earnings (from 31 March 2019) of ₹23m has increased by 0.9% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 56%, indicating the rate at which AVSL is growing has slowed down. What could be happening here? Well, let's examine what's going on with margins and if the entire industry is facing the same headwind.

In terms of returns from investment, AVSL Industries has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. Furthermore, its return on assets (ROA) of 7.5% is below the IN Chemicals industry of 8.8%, indicating AVSL Industries's are utilized less efficiently. However, its return on capital (ROC), which also accounts for AVSL Industries’s debt level, has increased over the past 3 years from 2.4% to 16%.

What does this mean?

Though AVSL Industries's past data is helpful, it is only one aspect of my investment thesis. While AVSL Industries has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research AVSL Industries to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for AVSL’s future growth? Take a look at our free research report of analyst consensus for AVSL’s outlook.

2. Financial Health: Are AVSL’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.

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 2019. This may not be consistent with full year annual report figures.

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