Understanding Jindal Cotex Limited’s (NSEI:JINDCOT) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Jindal Cotex is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. View our latest analysis for Jindal Cotex
How JINDCOT fared against its long-term earnings performance and its industry
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to examine various companies on a more comparable basis, using new information. For Jindal Cotex, its latest earnings (trailing twelve month) is -₹209.23M, which, in comparison to the previous year’s figure, has become less negative. Given that these figures are relatively short-term thinking, I have calculated an annualized five-year value for Jindal Cotex’s earnings, which stands at -₹549.16M. This means that, although net income is negative, it has become less negative over the years.We can further evaluate Jindal Cotex’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Jindal Cotex has seen an annual decline in revenue of -22.38%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the IN luxury industry has been growing, albeit, at a unexciting single-digit rate of 5.41% over the past year, and a substantial 10.89% over the past five. This means that, despite the fact that Jindal Cotex is currently loss-making, it may have benefited from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to forecast what will occur going forward, and when. The most valuable step is to examine company-specific issues Jindal Cotex may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Jindal Cotex to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is JINDCOT’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 JINDCOT 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 JINDCOT 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.