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For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Redington (India) Limited (NSE:REDINGTON) useful as an attempt to give more color around how Redington (India) is currently performing.
View our latest analysis for Redington (India)
Did REDINGTON perform worse than its track record and industry?
REDINGTON’s trailing twelve-month earnings (from 30 September 2018) of ₹4.6b has declined by -3.6% 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 8.2%, indicating the rate at which REDINGTON is growing has slowed down. Why is this? Well, let’s take a look at what’s going on with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, Redington (India) has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 5.2% exceeds the IN Electronic industry of 5.2%, indicating Redington (India) has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Redington (India)’s debt level, has declined over the past 3 years from 27% to 19%.
What does this mean?
Redington (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 unpredictable earnings, can have many factors affecting its business. You should continue to research Redington (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 REDINGTON’s future growth? Take a look at our free research report of analyst consensus for REDINGTON’s outlook.
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Financial Health: Are REDINGTON’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 30 September 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.