Examining Vimal Oil & Foods Limited’s (NSEI:VIMALOIL) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess VIMALOIL’s latest performance announced on 31 March 2017 and weigh these figures against its longer term trend and industry movements. Check out our latest analysis for Vimal Oil & Foods
How VIMALOIL fared against its long-term earnings performance and its industry
For the most up-to-date info, I use data from the most recent 12 months, 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 examine different stocks on a more comparable basis, using the most relevant data points. For Vimal Oil & Foods, the most recent earnings -₹106.2M, which compared to the previous year’s figure, has become less negative. Given that these figures may be somewhat myopic, I have determined an annualized five-year value for Vimal Oil & Foods’s net income, which stands at -₹83.1M. This shows that, Vimal Oil & Foods has historically performed better than recently, although it seems like earnings are now heading back in the right direction again.
We can further evaluate Vimal Oil & Foods’s loss by researching what has been happening in the industry as well as within the company. First, I want to quickly look into the line items. Revenue growth over last few years has grown by a mere 8.86%. Since top-line growth is also pretty flat, the key to profitability in the future would be managing cost growth rates. Looking at growth from a sector-level, the IN food products industry has been growing its average earnings by double-digit 26.89% in the previous year, and 14.42% over the past five years. This means despite the fact that Vimal Oil & Foods is currently running a loss, it may have benefited from industry tailwinds, moving earnings towards to right direction.
What does this mean?
Though Vimal Oil & Foods’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most insightful step is to examine company-specific issues Vimal Oil & Foods may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Vimal Oil & Foods to get a better picture of the stock by looking at: