Want To Invest In Mastek Limited (NSE:MASTEK)? Here’s How It Performed Lately
When Mastek Limited’s (NSE:MASTEK) announced its latest earnings (30 September 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Mastek’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not MASTEK actually performed well. Below is a quick commentary on how I see MASTEK has performed.
See our latest analysis for Mastek
How Did MASTEK’s Recent Performance Stack Up Against Its Past?
MASTEK’s trailing twelve-month earnings (from 30 September 2018) of ₹854m has jumped 44% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 18%, indicating the rate at which MASTEK is growing has accelerated. What’s the driver of this growth? Let’s see if it is merely owing to industry tailwinds, or if Mastek has experienced some company-specific growth.
In terms of returns from investment, Mastek has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 8.9% exceeds the IN IT industry of 7.0%, indicating Mastek has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Mastek’s debt level, has declined over the past 3 years from 16% to 16%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 0.2% to 0.6% over the past 5 years.
What does this mean?
Though Mastek’s past data is helpful, it is only one aspect of my investment thesis. While Mastek has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Mastek to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for MASTEK’s future growth? Take a look at our free research report of analyst consensus for MASTEK’s outlook.
Financial Health: Are MASTEK’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.
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.