PTC India Financial Services Limited's (NSE:PFS) Earnings Dropped -11.70%, How Did It Fare Against The Industry?

When PTC India Financial Services Limited (NSEI:PFS) released its most recent earnings update (31 March 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how India Financial Services performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see PFS has performed. View our latest analysis for India Financial Services

Commentary On PFS's Past Performance

I use data from the most recent 12 months, 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 technique allows me to examine many different companies on a similar basis, using the latest information. For India Financial Services, its latest trailing-twelve-month earnings is ₹3.45B, which, relative to the previous year's level, has dropped by -11.70%. Given that these values may be somewhat nearsighted, I’ve determined an annualized five-year figure for India Financial Services's earnings, which stands at ₹2.05B This means that although earnings growth was negative against the previous year, over a longer period of time, India Financial Services's profits have been rising on average.

How has it been able to do this? Let's take a look at whether it is merely because of industry tailwinds, or if India Financial Services has seen some company-specific growth. The rise in earnings seems to be bolstered by a substantial top-line increase overtaking its growth rate of expenses. Though this brought about a margin contraction, it has made India Financial Services more profitable. Scanning growth from a sector-level, the IN capital markets industry has been growing its average earnings by double-digit 32.81% in the past twelve months, and 15.56% over the past five years. This means any uplift the industry is benefiting from, India Financial Services has not been able to realize the gains unlike its average peer.

What does this mean?

Though India Financial Services's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. I recommend you continue to research India Financial Services to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is PFS’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 PFS 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 PFS 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.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 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.