Assessing Prolife Industries Limited’s (NSE:PROLIFE) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess PROLIFE’s recent performance announced on 31 March 2018 and evaluate these figures to its long-term trend and industry movements.

View our latest analysis for Prolife Industries

How Well Did PROLIFE Perform?

PROLIFE’s trailing twelve-month earnings (from 31 March 2018) of ₹15.0m has jumped 72.1% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 35.7%, indicating the rate at which PROLIFE is growing has accelerated. What’s enabled this growth? Let’s take a look at whether it is solely attributable to industry tailwinds, or if Prolife Industries has seen some company-specific growth.

Over the past couple of years, Prolife Industries grew its bottom line faster than revenue by efficiently controlling its costs. This has caused a margin expansion and profitability over time.

Scanning growth from a sector-level, the IN chemicals industry has been growing its average earnings by double-digit 24.4% over the past year, and 14.6% over the past half a decade. This growth is a median of profitable companies of 25 Chemicals companies in IN including E.I.D.- Parry (India), Ritesh International and Polychem. This means that any uplift the industry is gaining from, Prolife Industries is able to amplify this to its advantage.

In terms of returns from investment, Prolife Industries has fallen short of achieving a 20% return on equity (ROE), recording 14.9% instead. However, its return on assets (ROA) of 10.6% exceeds the IN Chemicals industry of 8.7%, indicating Prolife Industries has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Prolife Industries’s debt level, has increased over the past 3 years from 5.2% to 12.8%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 397% to 47.8% 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 Prolife Industries gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Prolife Industries to get a better picture of the stock by looking at: