Assessing Capital First Limited’s (NSEI:CAPF) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess CAPF’s recent performance announced on 31 December 2017 and evaluate these figures to its longer term trend and industry movements. Check out our latest analysis for Capital First
How Did CAPF’s Recent Performance Stack Up Against Its Past?
For the purpose of this commentary, I like 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 blend enables me to examine many different companies in a uniform manner using the most relevant data points. For Capital First, its most recent earnings (trailing twelve month) is ₹3.09B, which compared to last year’s figure, has increased by 42.20%. Given that these values may be fairly myopic, I’ve created an annualized five-year value for Capital First’s net income, which stands at ₹1.30B This shows that, generally, Capital First has been able to increasingly improve its net income over the last few years as well.How has it been able to do this? Let’s take a look at whether it is merely due to industry tailwinds, or if Capital First has experienced some company-specific growth. The climb in earnings seems to be supported by a strong top-line increase outstripping its growth rate of costs. Though this has led to a margin contraction, it has made Capital First more profitable. Inspecting growth from a sector-level, the IN consumer finance industry has been growing its average earnings by double-digit 17.20% in the past year, and 10.38% over the past five years. This suggests that any tailwind the industry is enjoying, Capital First is able to leverage this to its advantage.
What does this mean?
While past data is useful, it 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? I suggest you continue to research Capital First to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for CAPF’s future growth? Take a look at our free research report of analyst consensus for CAPF’s outlook.
- 2. Financial Health: Is CAPF’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.