After reading Adhunik Metaliks Limited’s (NSEI:ADHUNIK) 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. See our latest analysis for Adhunik Metaliks
How Well Did ADHUNIK Perform?
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine different companies on a similar basis, using the latest information. Adhunik Metaliks’s most recent bottom-line -₹14,801.0M, which, in comparison to the prior year’s figure, has become more negative. Given that these values are relatively short-term, I have computed an annualized five-year figure for Adhunik Metaliks’s earnings, which stands at -₹893.2M. This doesn’t seem to paint a better picture, since earnings seem to have consistently been getting more and more negative over time.
Additionally, we can evaluate Adhunik Metaliks’s loss by looking at what’s going on in the industry as well as within the company. First, I want to quickly look into the line items. Revenue growth over the past few years has been negative at -4.01%. The key to profitability here is to make sure the company’s cost growth is well-managed. Inspecting growth from a sector-level, the IN metals and mining industry has been growing its average earnings by double-digit 27.08% in the previous year, and a less exciting 3.25% over the past five. This suggests that whatever uplift the industry is deriving benefit from, Adhunik Metaliks has not been able to reap as much as its industry peers.
What does this mean?
Adhunik Metaliks’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues Adhunik Metaliks may be facing and whether management guidance has regularly been met in the past. You should continue to research Adhunik Metaliks to get a more holistic view of the stock by looking at: