When PI Industries Limited (NSE:PIIND) announced its most recent earnings (31 March 2019), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how PI Industries performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see PIIND has performed.
How Well Did PIIND Perform?
PIIND's trailing twelve-month earnings (from 31 March 2019) of ₹4.1b has jumped 12% 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 PIIND is growing has slowed down. What could be happening here? Well, let's look at what's transpiring with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, PI Industries has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 13% exceeds the IN Chemicals industry of 8.9%, indicating PI Industries has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for PI Industries’s debt level, has declined over the past 3 years from 28% to 21%.
What does this mean?
Though PI Industries's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as PI Industries gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research PI Industries to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PIIND’s future growth? Take a look at our free research report of analyst consensus for PIIND’s outlook.
- Financial Health: Are PIIND’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.
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.