Does Commercial Engineers & Body Builders Co Limited's (NSE:CEBBCO) 67.7% Earnings Growth Make It An Outperformer?

Assessing Commercial Engineers & Body Builders Co Limited's (NSEI:CEBBCO) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess CEBBCO's latest performance announced on 30 September 2017 and evaluate these figures to its historical trend and industry movements. See our latest analysis for Commercial Engineers & Body Builders Co

How Well Did CEBBCO Perform?

I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method enables me to examine different stocks on a similar basis, using the most relevant data points. Commercial Engineers & Body Builders Co's latest twelve-month earnings -₹348.4M, which, in comparison to the previous year's figure, has become less negative. Given that these values may be somewhat short-term thinking, I have calculated an annualized five-year value for CEBBCO's net income, which stands at -₹393.7M. This suggests that, though net income is negative, it has become less negative over the years.

We can further evaluate Commercial Engineers & Body Builders Co's loss by looking at what has been happening in the industry along with within the company. Firstly, I want to quickly look into the line items. Revenue growth over the last couple of years has been negative at -26.66%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Inspecting growth from a sector-level, the IN machinery industry has been growing its average earnings by double-digit 14.32% over the previous twelve months, and a flatter -0.50% over the previous five years. This means that, while Commercial Engineers & Body Builders Co is presently running a loss, it may have only just benefited from the recent industry expansion, moving earnings into a more favorable position.

What does this mean?

Though Commercial Engineers & Body Builders Co's past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues Commercial Engineers & Body Builders Co may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Commercial Engineers & Body Builders Co to get a more holistic view of the stock by looking at:

1. Financial Health: Is CEBBCO’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 CEBBCO 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 CEBBCO 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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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.