Measuring Jyoti Structures Limited’s (NSEI:JYOTISTRUC) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess JYOTISTRUC’s recent performance announced on 31 March 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for Jyoti Structures
Commentary On JYOTISTRUC’s Past Performance
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, 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 blend allows me to analyze different companies on a more comparable basis, using the most relevant data points. For Jyoti Structures, the latest earnings -₹14,260.4M, which, in comparison to the previous year’s level, has become more negative. Since these figures are fairly short-term thinking, I’ve estimated an annualized five-year figure for JYOTISTRUC’s earnings, which stands at -₹2,760.8M. This doesn’t look much better, since earnings seem to have consistently been getting more and more negative over time.
We can further evaluate Jyoti Structures’s loss by looking at what has been happening in the industry on top of within the company. First, I want to briefly look into the line items. Revenue growth over the past couple of years has been negative at -2.99%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Eyeballing growth from a sector-level, the IN construction and engineering industry has been growing its average earnings by double-digit 13.18% in the prior twelve months, and a more muted 2.95% over the past five. This means whatever uplift the industry is enjoying, Jyoti Structures has not been able to gain as much as its average peer.
What does this mean?
Though Jyoti Structures’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most valuable step is to assess company-specific issues Jyoti Structures may be facing and whether management guidance has steadily been met in the past. You should continue to research Jyoti Structures to get a more holistic view of the stock by looking at:
1. Financial Health: Is JYOTISTRUC’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.