After reading BLB Limited’s (NSEI:BLBLIMITED) most recent earnings announcement (31 March 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. View our latest analysis for BLB
Was BLBLIMITED’s weak performance lately a part of a long-term decline?
I look at data from the most recent 12 months, 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 method enables me to examine many different companies on a more comparable basis, using the most relevant data points. “For BLB, its “, most recent earnings is ₹9.0M, which compared to the prior year’s figure, has dropped by a substantial -42.92%. Since these values may be somewhat nearsighted, I’ve estimated an annualized five-year figure for BLBLIMITED’s earnings, which stands at -₹58.2M. This shows that although earnings growth was negative from last year, over time, BLB’s profits have been increasing on average.
What’s the driver of this growth? Let’s take a look at if it is only because of industry tailwinds, or if BLB has experienced some company-specific growth. Over the past few years, BLB expanded bottom-line, while its top-line declined, by effectively managing its costs. This has led to to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the IN capital markets industry has been growing its average earnings by double-digit 22.03% in the previous twelve months, and 11.83% over the past five years. This means whatever tailwind the industry is benefiting from, BLB has not been able to leverage it as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies are profitable, but have volatile earnings, can have many factors affecting its business. I suggest you continue to research BLB to get a better picture of the stock by looking at:
1. Financial Health: Is BLBLIMITED’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.
2. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass 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.