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Analyzing Shreyans Industries Limited’s (NSE:SHREYANIND) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess SHREYANIND’s recent performance announced on 31 March 2018 and compare these figures to its long-term trend and industry movements. View out our latest analysis for Shreyans Industries
Did SHREYANIND beat its long-term earnings growth trend and its industry?
SHREYANIND’s trailing twelve-month earnings (from 31 March 2018) of ₹311.83m has jumped 34.96% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 28.71%, indicating the rate at which SHREYANIND is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is merely due to an industry uplift, or if Shreyans Industries has seen some company-specific growth.
In the last couple of years, Shreyans Industries expanded its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Eyeballing growth from a sector-level, the IN forestry industry has been growing its average earnings by double-digit 18.94% over the prior year, and 26.87% over the last five years. This suggests that whatever uplift the industry is enjoying, Shreyans Industries is capable of leveraging this to its advantage.
In terms of returns from investment, Shreyans Industries has invested its equity funds well leading to a 20.17% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11.87% exceeds the IN Forestry industry of 7.67%, indicating Shreyans Industries has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Shreyans Industries’s debt level, has increased over the past 3 years from 7.57% to 21.41%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 52.48% to 24.87% over the past 5 years.
What does this mean?
Though Shreyans Industries’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Shreyans Industries to get a better picture of the stock by looking at:
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Financial Health: Is SHREYANIND’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 SHREYANIND 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 SHREYANIND 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 2018. 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.