Does Edelweiss Financial Services Limited’s (NSE:EDELWEISS) 48.52% Earnings Growth Reflect The Long-Term Trend?

Investors with a long-term horizong may find it valuable to assess Edelweiss Financial Services Limited’s (NSEI:EDELWEISS) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Edelweiss Financial Services is currently performing. Check out our latest analysis for Edelweiss Financial Services

Did EDELWEISS’s recent earnings growth beat the long-term trend and the industry?

For the most up-to-date info, I use the ‘latest twelve-month’ data, 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 blend allows me to assess different companies in a uniform manner using new information. For Edelweiss Financial Services, its most recent earnings (trailing twelve month) is ₹8.90B, which compared to last year’s figure, has risen by 48.52%. Since these values are somewhat nearsighted, I have computed an annualized five-year figure for EDELWEISS’s earnings, which stands at ₹3.52B This shows that, on average, Edelweiss Financial Services has been able to increasingly improve its bottom line over the last few years as well.

NSEI:EDELWEISS Income Statement May 9th 18
NSEI:EDELWEISS Income Statement May 9th 18
What’s enabled this growth? Well, let’s take a look at if it is only owing to industry tailwinds, or if Edelweiss Financial Services has seen some company-specific growth. The ascend in earnings seems to be propelled by a substantial top-line increase overtaking its growth rate of expenses. Though this brought about a margin contraction, it has made Edelweiss Financial Services more profitable. Viewing growth from a sector-level, the IN capital markets industry has been growing its average earnings by double-digit 34.18% in the prior twelve months, and 16.93% over the past half a decade. This shows that any tailwind the industry is profiting from, Edelweiss Financial Services is capable of leveraging this to its advantage.

What does this mean?

Though Edelweiss Financial Services’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Edelweiss Financial Services gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Edelweiss Financial Services to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for EDELWEISS’s future growth? Take a look at our free research report of analyst consensus for EDELWEISS’s outlook.
  2. Financial Health: Is EDELWEISS’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 31 March 2018. This may not be consistent with full year annual report figures.