Has Suprajit Engineering Limited (NSE:SUPRAJIT) Improved Earnings Growth In Recent Times?

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Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Suprajit Engineering Limited's (NSE:SUPRAJIT) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.

Check out our latest analysis for Suprajit Engineering

How SUPRAJIT fared against its long-term earnings performance and its industry

SUPRAJIT's trailing twelve-month earnings (from 30 September 2018) of ₹1.4b has increased by 4.2% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 26%, indicating the rate at which SUPRAJIT is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s occurring with margins and if the entire industry is feeling the heat.

In terms of returns from investment, Suprajit Engineering has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. However, its return on assets (ROA) of 11% exceeds the IN Auto Components industry of 7.6%, indicating Suprajit Engineering has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Suprajit Engineering’s debt level, has declined over the past 3 years from 24% to 23%.

What does this mean?

Suprajit Engineering's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Suprajit Engineering gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Suprajit Engineering to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for SUPRAJIT’s future growth? Take a look at our free research report of analyst consensus for SUPRAJIT’s outlook.
2. Financial Health: Are SUPRAJIT’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.
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 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 editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.