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Does Hindustan Media Ventures Limited's (NSE:HMVL) Past Performance Indicate A Weaker Future?

Simply Wall St

Assessing Hindustan Media Ventures Limited's (NSEI:HMVL) performance as a company requires looking at more than just a years' earnings data. Below, I will run you through a simple sense check to build perspective on how Hindustan Media Ventures is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its media industry peers.

See our latest analysis for Hindustan Media Ventures

Was HMVL weak performance lately part of a long-term decline?

HMVL's trailing twelve-month earnings (from 30 September 2019) of ₹1.1b has declined by -8.9% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -6.7%, indicating the rate at which HMVL is growing has slowed down. Why could this be happening? Well, let's look at what's going on with margins and if the whole industry is experiencing the hit as well.

NSEI:HMVL Income Statement, November 11th 2019

In terms of returns from investment, Hindustan Media Ventures has fallen short of achieving a 20% return on equity (ROE), recording 7.3% instead. Furthermore, its return on assets (ROA) of 6.0% is below the IN Media industry of 10%, indicating Hindustan Media Ventures's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Hindustan Media Ventures’s debt level, has declined over the past 3 years from 24% to 3.6%.

What does this mean?

Hindustan Media Ventures's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Usually companies that experience a prolonged period of diminishing earnings are undergoing some sort of reinvestment phase with the aim of keeping up with the latest industry disruption and growth. I suggest you continue to research Hindustan Media Ventures to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for HMVL’s future growth? Take a look at our free research report of analyst consensus for HMVL’s outlook.
  2. Financial Health: Are HMVL’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.
  3. 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 September 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 editorial-team@simplywallst.com. 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.