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Understanding Laxmi Cotspin Limited's (NSE:LAXMICOT) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Laxmi Cotspin is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period.
Check out our latest analysis for Laxmi Cotspin
Could LAXMICOT beat the long-term trend and outperform its industry?
LAXMICOT's trailing twelve-month earnings (from 31 March 2019) of ₹37m has jumped 42% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 0.04%, indicating the rate at which LAXMICOT is growing has accelerated. How has it been able to do this? Let's take a look at whether it is solely due to industry tailwinds, or if Laxmi Cotspin has seen some company-specific growth.
In terms of returns from investment, Laxmi Cotspin has fallen short of achieving a 20% return on equity (ROE), recording 7.8% instead. Furthermore, its return on assets (ROA) of 6.3% is below the IN Luxury industry of 6.3%, indicating Laxmi Cotspin's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Laxmi Cotspin’s debt level, has increased over the past 3 years from 11% to 11%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 91% to 90% over the past 5 years.
What does this mean?
Though Laxmi Cotspin's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Laxmi Cotspin 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 LAXMICOT’s future growth? Take a look at our free research report of analyst consensus for LAXMICOT’s outlook.
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Financial Health: Are LAXMICOT’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 March 2019. 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. Thank you for reading.