Analyzing Usha Martin Limited’s (NSEI:USHAMART) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess USHAMART’s recent performance announced on 30 September 2017 and compare these figures to its long-term trend and industry movements. View our latest analysis for Usha Martin
How Well Did USHAMART Perform?
For the purpose of this commentary, 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 blend allows me to examine different stocks on a similar basis, using new information. For Usha Martin, the latest twelve-month earnings -₹4,293.9M, which, in comparison to last year’s figure, has become more negative. Given that these figures may be fairly myopic, I have determined an annualized five-year figure for Usha Martin’s net income, which stands at -₹1,204.3M. This doesn’t seem to paint a better picture, as earnings seem to have gradually been getting more and more negative over time.
We can further examine Usha Martin’s loss by researching what’s going on in the industry along with within the company. First, I want to briefly look into the line items. Revenue growth over the past few years has risen by a mere 4.72%. Given that top-line growth is also pretty flat, the key to profitability moving forward would be managing cost growth rates. Looking at growth from a sector-level, the IN metals and mining industry has been growing its average earnings by double-digit 27.08% in the prior twelve months, and a more muted 3.25% over the past five years. This means that any uplift the industry is enjoying, Usha Martin has not been able to leverage it as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to envisage what will occur going forward, and when. The most insightful step is to examine company-specific issues Usha Martin may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Usha Martin to get a more holistic view of the stock by looking at:
1. Financial Health: Is USHAMART’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.
2. Valuation: What is USHAMART 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 USHAMART is currently mispriced by the market.