Measuring Solar Industries India Limited's (NSE:SOLARINDS) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SOLARINDS's recent performance announced on 30 June 2019 and compare these figures to its historical trend and industry movements.
Could SOLARINDS beat the long-term trend and outperform its industry?
SOLARINDS's trailing twelve-month earnings (from 30 June 2019) of ₹2.7b has jumped 13% 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 14%, indicating the rate at which SOLARINDS is growing has slowed down. What could be happening here? Well, let's look at what's occurring with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, Solar Industries India has invested its equity funds well leading to a 22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 14% exceeds the IN Chemicals industry of 8.7%, indicating Solar Industries India has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Solar Industries India’s debt level, has increased over the past 3 years from 26% to 29%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 63% to 47% over the past 5 years.
What does this mean?
Though Solar Industries India's past data is helpful, it is only one aspect of my investment thesis. While Solar Industries India 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 Solar Industries India to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SOLARINDS’s future growth? Take a look at our free research report of analyst consensus for SOLARINDS’s outlook.
- Financial Health: Are SOLARINDS’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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.