When Beardsell Limited (NSE:BEARDSELL) released its most recent earnings update (30 September 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Beardsell’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not BEARDSELL actually performed well. Below is a quick commentary on how I see BEARDSELL has performed.
How Well Did BEARDSELL Perform?
BEARDSELL’s trailing twelve-month earnings (from 30 September 2018) of ₹26m has declined by -12% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 22%, indicating the rate at which BEARDSELL is growing has slowed down. Why could this be happening? Let’s examine what’s transpiring with margins and if the entire industry is feeling the heat.
In terms of returns from investment, Beardsell has fallen short of achieving a 20% return on equity (ROE), recording 6.3% instead. Furthermore, its return on assets (ROA) of 5.1% is below the IN Building industry of 6.5%, indicating Beardsell’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Beardsell’s debt level, has declined over the past 3 years from 12% to 10%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 53% to 95% over the past 5 years.
What does this mean?
Beardsell’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. I suggest you continue to research Beardsell to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for BEARDSELL’s future growth? Take a look at our free research report of analyst consensus for BEARDSELL’s outlook.
- Financial Health: Are BEARDSELL’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.