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After reading Remsons Industries Limited's (NSE:REMSONSIND) most recent earnings announcement (31 March 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
See our latest analysis for Remsons Industries
Did REMSONSIND perform better than its track record and industry?
REMSONSIND's trailing twelve-month earnings (from 31 March 2019) of ₹34m has declined by -0.1% 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 55%, indicating the rate at which REMSONSIND is growing has slowed down. What could be happening here? Well, let’s take a look at what’s occurring with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Remsons Industries has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. Furthermore, its return on assets (ROA) of 7.0% is below the IN Auto Components industry of 7.9%, indicating Remsons Industries's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Remsons Industries’s debt level, has increased over the past 3 years from 8.5% to 21%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 131% to 121% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. You should continue to research Remsons Industries 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 REMSONSIND’s future growth? Take a look at our free research report of analyst consensus for REMSONSIND’s outlook.
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Financial Health: Are REMSONSIND’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.