For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Gujarat Mineral Development Corporation Limited (NSEI:GMDCLTD) useful as an attempt to give more color around how Gujarat Mineral Development is currently performing. See our latest analysis for Gujarat Mineral Development
How GMDCLTD fared against its long-term earnings performance and its industry
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to analyze various companies on a similar basis, using the most relevant data points. “For Gujarat Mineral Development, its “, latest twelve-month earnings is ₹3,240.9M, which, against the prior year’s level, has jumped up by 47.96%. Given that these values are somewhat short-term thinking, I have created an annualized five-year value for Gujarat Mineral Development’s earnings, which stands at ₹4,208.3M. This shows that, even though earnings growth from last year was positive, over the past couple of years, Gujarat Mineral Development’s earnings have been falling on average.
What could be happening here? Well, let’s look at what’s transpiring with margins and whether the rest of the industry is experiencing the hit as well. Although revenue growth over the past couple of years, has been negative, earnings growth has been declining by even more, suggesting that Gujarat Mineral Development has been ramping up its expenses. This harms margins and earnings, and is not a sustainable practice. Scanning growth from a sector-level, the IN oil and gas industry has been growing its average earnings by double-digit 45.95% over the prior twelve months, and a more subdued 5.53% over the past couple of years. This suggests that any tailwind the industry is deriving benefit from, Gujarat Mineral Development is capable of leveraging this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook. There may be variables that are affecting the entire industry thus the high industry growth rate over the same time frame. You should continue to research Gujarat Mineral Development to get a more holistic view of the stock by looking at: