Does Mirza International Limited's (NSE:MIRZAINT) Recent Track Record Look Strong?

For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Mirza International Limited (NSE:MIRZAINT) useful as an attempt to give more color around how Mirza International is currently performing.

View our latest analysis for Mirza International

Were MIRZAINT's earnings stronger than its past performances and the industry?

MIRZAINT's trailing twelve-month earnings (from 30 June 2018) of ₹761m has increased by 6.5% 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 13%, indicating the rate at which MIRZAINT is growing has slowed down. Why could this be happening? Well, let's examine what's transpiring with margins and if the rest of the industry is experiencing the hit as well.

In terms of returns from investment, Mirza International has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 10% exceeds the IN Luxury industry of 5.9%, indicating Mirza International has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Mirza International’s debt level, has declined over the past 3 years from 25% to 18%.

What does this mean?

Mirza International's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Mirza International to get a better picture of the stock by looking at:

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