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Measuring Nitin Fire Protection Industries Limited’s (NSEI:NITINFIRE) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess NITINFIRE’s recent performance announced on 31 March 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for Nitin Fire Protection Industries
How Well Did NITINFIRE Perform?
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to analyze different companies on a similar basis, using the most relevant data points. For Nitin Fire Protection Industries, its most recent bottom-line (trailing twelve month) is -₹279.36M, which, relative to the previous year’s figure, has turned from positive to negative. Given that these figures may be somewhat short-term, I have estimated an annualized five-year value for NITINFIRE’s earnings, which stands at ₹648.74M.
We can further analyze Nitin Fire Protection Industries’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Nitin Fire Protection Industries’s top-line has grown by 21.27% on average, signalling that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Eyeballing growth from a sector-level, the IN machinery industry has been growing, albeit, at a subdued single-digit rate of 8.95% in the prior year, and 3.69% over the last five years. This shows that whatever tailwind the industry is enjoying, Nitin Fire Protection Industries has not been able to realize the gains unlike its industry peers.
What does this mean?
Nitin Fire Protection Industries’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 hard to envisage what will occur going forward, and when. The most useful step is to examine company-specific issues Nitin Fire Protection Industries may be facing and whether management guidance has steadily been met in the past. You should continue to research Nitin Fire Protection Industries to get a better picture of the stock by looking at:
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Financial Health: Is NITINFIRE’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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Valuation: What is NITINFIRE worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether NITINFIRE is currently mispriced by the market.
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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 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.