After reading Tantia Constructions Limited’s (NSEI:TANTIACONS) most recent earnings announcement (31 March 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. View our latest analysis for Tantia Constructions
How Well Did TANTIACONS Perform?
I look at 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 enables me to examine various companies on a similar basis, using new information. For Tantia Constructions, the most recent bottom-line -₹868.5M, which, in comparison to last year’s figure, has become more negative. Given that these figures are somewhat nearsighted, I have computed an annualized five-year value for TANTIACONS’s earnings, which stands at -₹138.4M. This doesn’t look much better, since earnings seem to have steadily been getting more and more negative over time.
Additionally, we can analyze Tantia Constructions’s loss by researching what has been happening in the industry on top of within the company. Firstly, I want to quickly look into the line items. Revenue growth over the last few years has been negative at -10.85%. The key to profitability here is to make sure the company’s cost growth is well-managed. Eyeballing growth from a sector-level, the IN construction and engineering industry has been growing its average earnings by double-digit 13.18% over the previous year, and a less exciting 2.95% over the past five years. This means that whatever uplift the industry is benefiting from, Tantia Constructions has not been able to reap as much as its industry peers.
What does this mean?
Tantia Constructions’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most insightful step is to examine company-specific issues Tantia Constructions may be facing and whether management guidance has regularly been met in the past. You should continue to research Tantia Constructions to get a better picture of the stock by looking at: