In this article, I will take a look at RPP Infra Projects Limited's (NSE:RPPINFRA) most recent earnings update (30 June 2019) and compare these latest figures against its performance over the past few years, along with how the rest of RPPINFRA'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.
How Well Did RPPINFRA Perform?
RPPINFRA's trailing twelve-month earnings (from 30 June 2019) of ₹214m has jumped 40% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 8.9%, indicating the rate at which RPPINFRA is growing has accelerated. What's enabled this growth? Well, let’s take a look at whether it is only because of industry tailwinds, or if RPP Infra Projects has seen some company-specific growth.
In terms of returns from investment, RPP Infra Projects has fallen short of achieving a 20% return on equity (ROE), recording 8.9% instead. However, its return on assets (ROA) of 8.3% exceeds the IN Construction industry of 6.2%, indicating RPP Infra Projects has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for RPP Infra Projects’s debt level, has declined over the past 3 years from 20% to 20%.
What does this mean?
Though RPP Infra Projects's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as RPP Infra Projects gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research RPP Infra Projects to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for RPPINFRA’s future growth? Take a look at our free research report of analyst consensus for RPPINFRA’s outlook.
- Financial Health: Are RPPINFRA’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 June 2019. This may not be consistent with full year annual report figures.
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