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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 SKF India Limited (NSE:SKFINDIA) useful as an attempt to give more color around how SKF India is currently performing.
View our latest analysis for SKF India
How SKFINDIA fared against its long-term earnings performance and its industry
SKFINDIA's trailing twelve-month earnings (from 31 March 2019) of ₹3.4b has jumped 13% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which SKFINDIA is growing has accelerated. What's enabled this growth? Let's take a look at if it is only because of an industry uplift, or if SKF India has experienced some company-specific growth.
In terms of returns from investment, SKF India has fallen short of achieving a 20% return on equity (ROE), recording 20% instead. However, its return on assets (ROA) of 15% exceeds the IN Machinery industry of 7.6%, indicating SKF India has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for SKF India’s debt level, has increased over the past 3 years from 15% to 25%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While SKF India has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research SKF India to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for SKFINDIA’s future growth? Take a look at our free research report of analyst consensus for SKFINDIA’s outlook.
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Financial Health: Are SKFINDIA’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 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.