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Examining GM.Breweries Limited’s (NSEI:GMBREW) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess GMBREW’s latest performance announced on 31 March 2018 and compare these figures to its longer term trend and industry movements. Check out our latest analysis for G.M.Breweries
How Did GMBREW’s Recent Performance Stack Up Against Its Past?
I like to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method enables me to assess different companies in a uniform manner using the most relevant data points. For G.M.Breweries, its latest trailing-twelve-month earnings is ₹728.99M, which, relative to last year’s level, has climbed up by an impressive 67.06%. Given that these values are fairly myopic, I’ve calculated an annualized five-year figure for GMBREW’s earnings, which stands at ₹309.01M This shows that, generally, G.M.Breweries has been able to steadily raise its profits over the last few years as well.
What’s the driver of this growth? Let’s take a look at if it is only a result of industry tailwinds, or if G.M.Breweries has experienced some company-specific growth. In the past couple of years, G.M.Breweries grew its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Viewing growth from a sector-level, the IN beverage industry has been growing, albeit, at a subdued single-digit rate of 3.28% in the past year, and 2.23% over the past half a decade. This means that whatever recent headwind the industry is experiencing, G.M.Breweries is less exposed compared to its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While G.M.Breweries has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research G.M.Breweries to get a more holistic view of the stock by looking at:
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Financial Health: Is GMBREW’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.
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Valuation: What is GMBREW worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether GMBREW is currently mispriced by the market.
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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 2018. 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.