Today I will examine Kabra Extrusiontechnik Limited's (NSE:KABRAEXTRU) latest earnings update (31 March 2019) and compare these figures against its performance over the past couple of years, in addition to how the rest of KABRAEXTRU's industry performed. As a long-term investor, I find it useful to analyze the company's trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time.
Could KABRAEXTRU beat the long-term trend and outperform its industry?
KABRAEXTRU's trailing twelve-month earnings (from 31 March 2019) of ₹244m has jumped 22% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 9.5%, indicating the rate at which KABRAEXTRU is growing has accelerated. How has it been able to do this? Let's see whether it is solely owing to industry tailwinds, or if Kabra Extrusiontechnik has experienced some company-specific growth.
In terms of returns from investment, Kabra Extrusiontechnik has fallen short of achieving a 20% return on equity (ROE), recording 9.9% instead. Furthermore, its return on assets (ROA) of 5.6% is below the IN Machinery industry of 7.1%, indicating Kabra Extrusiontechnik's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Kabra Extrusiontechnik’s debt level, has declined over the past 3 years from 18% to 5.4%.
What does this mean?
Kabra Extrusiontechnik's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Kabra Extrusiontechnik 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 Kabra Extrusiontechnik to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for KABRAEXTRU’s future growth? Take a look at our free research report of analyst consensus for KABRAEXTRU’s outlook.
- Financial Health: Are KABRAEXTRU’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 31 March 2019. This may not be consistent with full year annual report figures.
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