Interested In Tech Mahindra Limited (NSE:TECHM)? Here’s What Its Recent Performance Looks Like
When Tech Mahindra Limited’s (NSE:TECHM) announced its latest earnings (30 June 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Tech Mahindra’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not TECHM actually performed well. Below is a quick commentary on how I see TECHM has performed.
View our latest analysis for Tech Mahindra
How TECHM fared against its long-term earnings performance and its industry
TECHM’s trailing twelve-month earnings (from 30 June 2018) of ₹39.0b has jumped 36% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 7.9%, indicating the rate at which TECHM is growing has accelerated. What’s the driver of this growth? Let’s take a look at if it is only due to industry tailwinds, or if Tech Mahindra has seen some company-specific growth.
In terms of returns from investment, Tech Mahindra has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. However, its return on assets (ROA) of 12% exceeds the IN IT industry of 7.8%, indicating Tech Mahindra has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Tech Mahindra’s debt level, has declined over the past 3 years from 25% to 20%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Tech Mahindra gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Tech Mahindra to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TECHM’s future growth? Take a look at our free research report of analyst consensus for TECHM’s outlook.
Financial Health: Are TECHM’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 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
