Where Edelweiss Financial Services Limited (NSE:EDELWEISS) Stands In Terms Of Earnings Growth Against Its Industry

After looking at Edelweiss Financial Services Limited's (NSEI:EDELWEISS) latest earnings update (31 December 2017), I found it helpful to revisit the company's performance in the past couple of years and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is an important aspect. In this article I briefly touch on my key findings. See our latest analysis for Edelweiss Financial Services

Commentary On EDELWEISS's Past Performance

For the most up-to-date info, I use data from the most recent 12 months, 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 allows me to assess various companies in a uniform manner using the most relevant data points. For Edelweiss Financial Services, its most recent bottom-line (trailing twelve month) is ₹8,019.6M, which, relative to the prior year's level, has jumped up by 45.53%. Since these values are fairly myopic, I’ve determined an annualized five-year value for Edelweiss Financial Services's earnings, which stands at ₹3,283.0M. This suggests that, generally, Edelweiss Financial Services has been able to gradually grow its earnings over the past few years as well.

What's enabled this growth? Let's take a look at whether it is solely owing to an industry uplift, or if Edelweiss Financial Services has experienced some company-specific growth. The climb in earnings seems to be propelled by a robust top-line increase overtaking its growth rate of expenses. Though this has led to a margin contraction, it has made Edelweiss Financial Services more profitable. Scanning growth from a sector-level, the IN capital markets industry has been growing its average earnings by double-digit 23.35% over the past twelve months, and 13.84% over the past half a decade. This shows that any uplift the industry is deriving benefit from, Edelweiss Financial Services is able to leverage this to its advantage.

What does this mean?

While past data is useful, it doesn’t tell the whole story. 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 suggest 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 December 2017. This may not be consistent with full year annual report figures.

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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.