After looking at Tips Industries Limited’s (NSE:TIPSINDLTD) latest earnings announcement (30 June 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
Check out our latest analysis for Tips Industries
Could TIPSINDLTD beat the long-term trend and outperform its industry?
TIPSINDLTD’s trailing twelve-month earnings (from 30 June 2018) of ₹35m has jumped 49% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 24%, indicating the rate at which TIPSINDLTD is growing has accelerated. What’s the driver of this growth? Let’s take a look at if it is solely a result of an industry uplift, or if Tips Industries has experienced some company-specific growth.
In terms of returns from investment, Tips Industries has fallen short of achieving a 20% return on equity (ROE), recording 5.0% instead. Furthermore, its return on assets (ROA) of 4.3% is below the IN Entertainment industry of 4.4%, indicating Tips Industries’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Tips Industries’s debt level, has increased over the past 3 years from 1.6% to 4.8%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 107% to 51% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Tips Industries 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 Tips Industries 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 TIPSINDLTD’s future growth? Take a look at our free research report of analyst consensus for TIPSINDLTD’s outlook.
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Financial Health: Are TIPSINDLTD’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.