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For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Mahindra Holidays & Resorts India Limited’s (NSE:MHRIL) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
View our latest analysis for Mahindra Holidays & Resorts India
Was MHRIL’s weak performance lately a part of a long-term decline?
MHRIL’s trailing twelve-month earnings (from 31 March 2018) of ₹1.3b has declined by -11% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 11%, indicating the rate at which MHRIL is growing has slowed down. Why could this be happening? Well, let’s look at what’s going on with margins and whether the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Mahindra Holidays & Resorts India has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. Furthermore, its return on assets (ROA) of 3.2% is below the IN Hospitality industry of 4.8%, indicating Mahindra Holidays & Resorts India’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Mahindra Holidays & Resorts India’s debt level, has increased over the past 3 years from 5.4% to 5.5%.
What does this mean?
Mahindra Holidays & Resorts India’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. You should continue to research Mahindra Holidays & Resorts India 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 MHRIL’s future growth? Take a look at our free research report of analyst consensus for MHRIL’s outlook.
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Financial Health: Are MHRIL’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 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.