For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on E-Land Apparel Limited (NSEI:ELAND) useful as an attempt to give more color around how E-Land Apparel is currently performing. Check out our latest analysis for E-Land Apparel
Commentary On ELAND’s Past Performance
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 enables me to analyze different companies on a more comparable basis, using the most relevant data points. For E-Land Apparel, its latest twelve-month earnings is -₹342.7M, which, in comparison to the previous year’s level, has become more negative. Since these values are somewhat nearsighted, I’ve calculated an annualized five-year figure for ELAND’s earnings, which stands at -₹643.2M. This suggests that, despite the fact that net income is negative, it has become less negative over the years.
We can further evaluate E-Land Apparel’s loss by looking at what’s going on in the industry as well as within the company. First, I want to quickly look into the line items. Revenue growth over the past few years has been negative at -7.98%. The key to profitability here is to make sure the company’s cost growth is well-managed. Scanning growth from a sector-level, the IN luxury industry has been growing, albeit, at a muted single-digit rate of 3.81% in the past year, and 5.76% over the past five years. This means any recent headwind the industry is facing, it’s hitting E-Land Apparel harder than its peers.
What does this mean?
E-Land Apparel’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most useful step is to assess company-specific issues E-Land Apparel may be facing and whether management guidance has steadily been met in the past. You should continue to research E-Land Apparel to get a more holistic view of the stock by looking at:
1. Financial Health: Is ELAND’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.