Analyzing SEL Manufacturing Company Limited’s (NSEI:SELMCL) 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 SELMCL’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 SEL Manufacturing
Was SELMCL’s recent earnings decline indicative of a tough track record?
For the purpose of this commentary, I like to 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 enables me to analyze many different companies on a more comparable basis, using the latest information. For SEL Manufacturing, its most recent bottom-line is -₹9,332.6M, which compared to last year’s figure, has become more negative. Given that these values are somewhat myopic, I have estimated an annualized five-year figure for SELMCL’s earnings, which stands at -₹1,766.1M. This doesn’t look much better, since earnings seem to have gradually been getting more and more negative over time.
We can further analyze SEL Manufacturing’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 last few years has been fairly soft, remaining flat on average at 0.49%. Since top-line growth is also pretty flat, the key to profitability in the future would be managing cost growth rates. Scanning growth from a sector-level, the IN luxury industry has been growing, albeit, at a subdued single-digit rate of 3.81% over the previous twelve months, and 5.76% over the previous five years. This shows that whatever near-term headwind the industry is facing, it’s hitting SEL Manufacturing harder than its peers.
What does this mean?
SEL Manufacturing’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 envisage what will occur going forward, and when. The most valuable step is to examine company-specific issues SEL Manufacturing may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research SEL Manufacturing to get a better picture of the stock by looking at: