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Assessing BEML Limited’s (NSEI:BEML) 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 BEML’s recent performance announced on 31 March 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for BEML

How Well Did BEML Perform?

I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to analyze many different companies on a similar basis, using new information. For BEML, its latest trailing-twelve-month earnings is IN₨847.62M, which compared to the previous year’s figure, has increased by 31.66%. Given that these figures are fairly nearsighted, I’ve created an annualized five-year figure for BEML’s net income, which stands at IN₨402.44M This means that, on average, BEML has been able to gradually raise its earnings over the last couple of years as well.

What’s the driver of this growth? Let’s see whether it is only owing to industry tailwinds, or if BEML has seen some company-specific growth. In the last couple of years, BEML top-line expansion has outstripped earnings and the growth rate of expenses. Though this has caused a margin contraction, it has moderated BEML’s earnings contraction. Inspecting growth from a sector-level, the IN machinery industry has been growing its average earnings by double-digit 11.66% in the past twelve months, and a flatter 0.096% over the past five. This shows that whatever tailwind the industry is deriving benefit from, BEML is capable of amplifying this to its advantage.

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 BEML gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research BEML to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is BEML’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.

• 2. 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 2017. 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.