For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Husys Consulting Limited’s (NSE:HUSYSLTD) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
View our latest analysis for Husys Consulting
Did HUSYSLTD beat its long-term earnings growth trend and its industry?
HUSYSLTD’s trailing twelve-month earnings (from 31 March 2018) of ₹11m has increased by 9.5% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 42%, indicating the rate at which HUSYSLTD is growing has slowed down. Why could this be happening? Well, let’s look at what’s going on with margins and if the entire industry is facing the same headwind.
In terms of returns from investment, Husys Consulting has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 12% exceeds the IN Professional Services industry of 6.3%, indicating Husys Consulting has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Husys Consulting’s debt level, has declined over the past 3 years from 25% to 20%.
What does this mean?
Though Husys Consulting’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 suggest you continue to research Husys Consulting 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 HUSYSLTD’s future growth? Take a look at our free research report of analyst consensus for HUSYSLTD’s outlook.
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Financial Health: Are HUSYSLTD’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 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.