Understanding how JBF Industries Limited (NSEI:JBFIND) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how JBF Industries is doing by comparing its latest earnings with its long-term trend as well as the performance of its luxury industry peers. Check out our latest analysis for JBF Industries
Was JBFIND’s weak performance lately a part of a long-term decline?
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method enables me to examine many different companies on a similar basis, using the most relevant data points. For JBF Industries, its latest twelve-month earnings is -₹3,403.0M, which, in comparison to the prior year’s level, has become more negative. Given that these values may be relatively myopic, I’ve computed an annualized five-year value for JBFIND’s net income, which stands at ₹1,147.7M.We can further assess JBF Industries’s loss by looking at what has been happening in the industry as well as within the company. First, I want to briefly look into the line items. Revenue growth over the past couple of years has increased by a mere 5.85%. Since top-line growth is also pretty stale the key to profitability going forward would be controlling cost growth rates. Eyeballing growth from a sector-level, the IN luxury industry has been growing, albeit, at a unexciting single-digit rate of 3.81% over the prior year, and 5.76% over the past five years. This means whatever near-term headwind the industry is facing, it’s hitting JBF Industries harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to envisage what will occur going forward, and when. The most valuable step is to examine company-specific issues JBF Industries may be facing and whether management guidance has steadily been met in the past. You should continue to research JBF Industries to get a better picture of the stock by looking at:
1. Financial Health: Is JBFIND’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. 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.