Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess NRB Industrial Bearings Limited’s (NSEI:NIBL) 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. View our latest analysis for NRB Industrial Bearings
Did NIBL beat its long-term earnings growth trend and its industry?
I like to use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to analyze different stocks on a similar basis, using the most relevant data points. For NRB Industrial Bearings, its latest earnings is -₹162.9M, which, against the prior year’s level, has become less negative. Since these figures may be fairly myopic, I’ve calculated an annualized five-year figure for NIBL’s net income, which stands at -₹152.0M. This suggests that, NRB Industrial Bearings has historically performed better than recently, although it seems like earnings are now heading back towards to right direction again.
Additionally, we can evaluate NRB Industrial Bearings’s loss by researching what has been happening in the industry as well as within the company. First, I want to briefly look into the line items. Revenue growth over the past few years has risen by 14.91%, implying that NRB Industrial Bearings is in a high-growth period with expenses racing ahead elevated top-line growth rates, leading to yearly losses. Looking at growth from a sector-level, the IN machinery industry has been growing its average earnings by double-digit 14.32% in the prior year, and a flatter -0.50% over the past five. This means even though NRB Industrial Bearings is currently loss-making, it may have only just benefited from the recent industry expansion, moving earnings in the right direction.
What does this mean?
Though NRB Industrial Bearings’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to predict what will occur going forward, and when. The most insightful step is to assess company-specific issues NRB Industrial Bearings may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research NRB Industrial Bearings to get a better picture of the stock by looking at:
1. Financial Health: Is NIBL’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.