Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Indiabulls Ventures Limited’s (NSEI:IBVENTURES) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for Indiabulls Ventures
Commentary On IBVENTURES’s Past Performance
I like to 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 method allows me to assess many different companies on a similar basis, using the most relevant data points. For Indiabulls Ventures, its latest trailing-twelve-month earnings is ₹2.37B, which, against the prior year’s level, has soared up by over 100%. Since these figures may be relatively short-term thinking, I have determined an annualized five-year figure for IBVENTURES’s earnings, which stands at ₹902.82M This shows that, on average, Indiabulls Ventures has been able to steadily improve its bottom line over the last few years as well.
What’s the driver of this growth? Let’s take a look at if it is only attributable to an industry uplift, or if Indiabulls Ventures has experienced some company-specific growth. In the last couple of years, Indiabulls Ventures increased its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Inspecting growth from a sector-level, the IN capital markets industry has been growing its average earnings by double-digit 32.81% in the previous twelve months, and 15.56% over the previous five years. This means whatever tailwind the industry is benefiting from, Indiabulls Ventures is able to amplify this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Indiabulls Ventures gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Indiabulls Ventures to get a better picture of the stock by looking at:
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Financial Health: Is IBVENTURES’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 IBVENTURES 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 IBVENTURES 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.