For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Rohit Ferro-Tech Limited (NSEI:ROHITFERRO) useful as an attempt to give more color around how Rohit Ferro-Tech is currently performing. See our latest analysis for Rohit Ferro-Tech
How Did ROHITFERRO’s Recent Performance Stack Up Against Its Past?
I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend enables me to analyze different companies on a more comparable basis, using the most relevant data points. Rohit Ferro-Tech’s latest earnings -₹3,401.8M, which, in comparison to last year’s level, has become less negative. Since these figures are fairly short-term thinking, I have computed an annualized five-year figure for Rohit Ferro-Tech’s earnings, which stands at -₹1,823.7M. This shows that, Rohit Ferro-Tech has historically performed better than recently, even though it seems like earnings are now heading back towards to right direction again.
Additionally, we can analyze Rohit Ferro-Tech’s loss by looking at what’s going on in the industry along with within the company. First, I want to quickly look into the line items. Revenue growth over the past couple of years has been negative at -4.82%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Scanning growth from a sector-level, the IN metals and mining industry has been growing its average earnings by double-digit 27.08% over the past year, and a more subdued 3.25% over the previous few years. This means that, although Rohit Ferro-Tech is currently unprofitable, it may have been aided by industry tailwinds, moving earnings towards to right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most useful step is to assess company-specific issues Rohit Ferro-Tech may be facing and whether management guidance has steadily been met in the past. You should continue to research Rohit Ferro-Tech to get a more holistic view of the stock by looking at:
1. Financial Health: Is ROHITFERRO’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.