Today I will take a look at HCL Technologies Limited’s (NSEI:HCLTECH) most recent earnings update (30 September 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the it industry performed. As an investor, I find it beneficial to assess HCLTECH’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for HCL Technologies
Did HCLTECH’s recent earnings growth beat the long-term trend and the industry?
I prefer 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 method enables me to assess different companies on a similar basis, using the most relevant data points. “For HCL Technologies, its “, latest twelve-month earnings is $1,331.8M, which, in comparison to the prior year’s level, has increased by 12.64%. Given that these figures are fairly short-term, I’ve estimated an annualized five-year figure for HCL Technologies’s earnings, which stands at $864.5M. This suggests that, generally, HCL Technologies has been able to gradually improve its earnings over the last few years as well.
What’s enabled this growth? Let’s take a look at if it is merely due to industry tailwinds, or if HCL Technologies has experienced some company-specific growth. Over the last couple of years, HCL Technologies grew its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the IN it industry has been growing, albeit, at a muted single-digit rate of 8.05% over the previous twelve months, and a substantial 13.88% over the past couple of years. This shows that whatever tailwind the industry is gaining from, HCL Technologies is capable of amplifying this to its advantage.
What does this mean?
HCL Technologies’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While HCL Technologies 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 HCL Technologies to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for HCLTECH’s future growth? Take a look at our free research report of analyst consensus for HCLTECH’s outlook.