After looking at Shekhawati Poly-Yarn Limited’s (NSEI:SPYL) latest earnings announcement (31 December 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 Shekhawati Poly-Yarn’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. Check out our latest analysis for Shekhawati Poly-Yarn
How Did SPYL’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 blend allows me to examine different companies in a uniform manner using the most relevant data points. For Shekhawati Poly-Yarn, its most recent bottom-line (trailing twelve month) is -₹213.46M, which, against the prior year’s level, has become less negative. Since these figures are somewhat nearsighted, I’ve determined an annualized five-year value for Shekhawati Poly-Yarn’s net income, which stands at -₹194.56M. This shows that, Shekhawati Poly-Yarn has historically performed better than recently, even though it seems like earnings are now heading back in the right direction again.
We can further assess Shekhawati Poly-Yarn’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Shekhawati Poly-Yarn has seen an annual decline in revenue of -5.93%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the IN luxury industry has been growing, albeit, at a subdued single-digit rate of 5.25% over the past year, and a substantial 12.10% over the past five years. This means despite the fact that Shekhawati Poly-Yarn is presently unprofitable, it may have benefited from industry tailwinds, moving earnings in the right direction.
What does this mean?
Shekhawati Poly-Yarn’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Shekhawati Poly-Yarn may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Shekhawati Poly-Yarn to get a better picture of the stock by looking at: