In this article, I will take a look at United Polyfab Gujarat Limited’s (NSEI:UNITEDPOLY) most recent earnings update (31 March 2017) and compare these latest figures against its performance over the past few years, along with how the rest of UNITEDPOLY’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for United Polyfab Gujarat
How UNITEDPOLY fared against its long-term earnings performance and its industry
I prefer to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to analyze many different companies on a more comparable basis, using the most relevant data points. “For United Polyfab Gujarat, its “, most recent earnings is ₹10.5M, which compared to the previous year’s figure, has increased by 34.01%. Since these figures may be fairly short-term thinking, I have calculated an annualized five-year figure for UNITEDPOLY’s earnings, which stands at ₹3.7M. This means on average, United Polyfab Gujarat has been able to increasingly grow its net income over the past few years as well.
What’s the driver of this growth? Let’s take a look at if it is solely due to an industry uplift, or if United Polyfab Gujarat has seen some company-specific growth. Over the last couple of years, United Polyfab Gujarat increased its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Inspecting growth from a sector-level, the IN luxury industry has been growing, albeit, at a muted single-digit rate of 3.81% over the past twelve months, and 5.76% over the previous five years. This shows that whatever recent headwind the industry is facing, United Polyfab Gujarat is less exposed compared to its peers.
What does this mean?
Though United Polyfab Gujarat’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as United Polyfab Gujarat gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research United Polyfab Gujarat to get a better picture of the stock by looking at:
1. Financial Health: Is UNITEDPOLY’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.