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Examining NIIT Limited’s (NSE:NIITLTD) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess NIITLTD’s latest performance announced on 31 December 2018 and weigh these figures against its longer term trend and industry movements.
Check out our latest analysis for NIIT
Were NIITLTD’s earnings stronger than its past performances and the industry?
NIITLTD’s trailing twelve-month earnings (from 31 December 2018) of ₹829m has jumped 14% 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 41%, indicating the rate at which NIITLTD is growing has slowed down. What could be happening here? Well, let’s look at what’s going on with margins and whether the entire industry is facing the same headwind.
In terms of returns from investment, NIIT has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 6.6% is below the IN IT industry of 7.0%, indicating NIIT’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for NIIT’s debt level, has increased over the past 3 years from 0.3% to 3.9%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 20% to 18% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as NIIT gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research NIIT to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for NIITLTD’s future growth? Take a look at our free research report of analyst consensus for NIITLTD’s outlook.
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Financial Health: Are NIITLTD’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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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 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.