After reading JBM Auto Limited’s (NSE:JBMA) most recent earnings announcement (30 September 2018), 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 pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether JBM Auto’s performance has been impacted by industry movements. In this article I briefly touch on my key findings.
How JBMA fared against its long-term earnings performance and its industry
JBMA’s trailing twelve-month earnings (from 30 September 2018) of ₹767m has jumped 21% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 5.6%, indicating the rate at which JBMA is growing has accelerated. What’s the driver of this growth? Let’s take a look at if it is only due to an industry uplift, or if JBM Auto has seen some company-specific growth.
In terms of returns from investment, JBM Auto has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 8.3% exceeds the IN Auto Components industry of 7.6%, indicating JBM Auto has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for JBM Auto’s debt level, has declined over the past 3 years from 24% to 21%.
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 JBM Auto gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research JBM Auto to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for JBMA’s future growth? Take a look at our free research report of analyst consensus for JBMA’s outlook.
- Financial Health: Are JBMA’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.
- 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 30 September 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.