Does Pearl Global Industries Limited’s (NSE:PGIL) Recent Track Record Look Strong?

Examining Pearl Global Industries Limited’s (NSEI:PGIL) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess PGIL’s latest performance announced on 31 December 2019 and weight these figures against its longer term trend and industry movements.

See our latest analysis for Pearl Global Industries

Commentary On PGIL’s Past Performance

PGIL’s trailing twelve-month earnings (from 31 December 2019) of ₹576m has jumped 20% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 13%, indicating the rate at which PGIL is growing has accelerated. How has it been able to do this? Let’s take a look at if it is solely due to industry tailwinds, or if Pearl Global Industries has seen some company-specific growth.

NSEI:PGIL Income Statement, February 17th 2020
NSEI:PGIL Income Statement, February 17th 2020

In terms of returns from investment, Pearl Global Industries has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 6.8% exceeds the IN Luxury industry of 5.7%, indicating Pearl Global Industries has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Pearl Global Industries’s debt level, has declined over the past 3 years from 12% to 5.0%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 51% to 74% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Pearl Global Industries gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Pearl Global Industries to get a more holistic view of the stock by looking at:

  1. Financial Health: Are PGIL’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 PGIL 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 PGIL is currently mispriced by the market.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2019. This may not be consistent with full year annual report figures.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.