Measuring Aarvi Encon Limited’s (NSEI:AARVI) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess AARVI’s recent performance announced on 31 March 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for Aarvi Encon
Commentary On AARVI’s Past Performance
For the purpose of this commentary, I like to use 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 technique allows me to examine different companies on a more comparable basis, using the latest information. “For Aarvi Encon, its “, latest earnings is ₹53.4M, which compared to the prior year’s level, has escalated by over 100%. Since these figures may be relatively short-term thinking, I’ve created an annualized five-year value for AARVI’s earnings, which stands at ₹46.7M. This suggests that, on average, Aarvi Encon has been able to increasingly grow its profits over the past few years as well.
What’s the driver of this growth? Well, let’s take a look at whether it is solely because of an industry uplift, or if Aarvi Encon has experienced some company-specific growth. Over the past few years, Aarvi Encon top-line expansion has outstripped earnings and the growth rate of expenses. Though this has led to a margin contraction, it has cushioned Aarvi Encon’s earnings contraction. Viewing growth from a sector-level, the IN professional services industry has been multiplying average earnings growth of 58.98% over the previous year, and a strong 28.27% over the past couple of years. This means any uplift the industry is deriving benefit from, Aarvi Encon is able to leverage this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Aarvi Encon has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Aarvi Encon to get a more holistic view of the stock by looking at:
1. Financial Health: Is AARVI’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.