For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Dynemic Products Limited's (NSE:DYNPRO) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Did DYNPRO beat its long-term earnings growth trend and its industry?
DYNPRO's trailing twelve-month earnings (from 31 March 2019) of ₹180m has increased by 2.4% 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 15%, indicating the rate at which DYNPRO is growing has slowed down. Why could this be happening? Well, let's look at what's occurring with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Dynemic Products has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 12% exceeds the IN Chemicals industry of 8.7%, indicating Dynemic Products has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Dynemic Products’s debt level, has increased over the past 3 years from 19% to 23%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 48% to 29% over the past 5 years.
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 Dynemic Products gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Dynemic Products to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for DYNPRO’s future growth? Take a look at our free research report of analyst consensus for DYNPRO’s outlook.
- Financial Health: Are DYNPRO’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 email@example.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.