Want To Invest In Hindustan Petroleum Corporation Limited (NSE:HINDPETRO)? Here's How It Performed Lately

In this commentary, I will examine Hindustan Petroleum Corporation Limited's (NSEI:HINDPETRO) latest earnings update (31 March 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the oil and gas industry performed. As an investor, I find it beneficial to assess HINDPETRO’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. View our latest analysis for Hindustan Petroleum

How HINDPETRO fared against its long-term earnings performance and its industry

I prefer to 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 technique enables me to assess many different companies on a similar basis, using new information. For Hindustan Petroleum, its most recent bottom-line (trailing twelve month) is ₹82.36B, which compared to the previous year's level, has risen by a substantial 76.18%. Given that these figures are somewhat nearsighted, I’ve computed an annualized five-year figure for Hindustan Petroleum's earnings, which stands at ₹26.94B This means that, on average, Hindustan Petroleum has been able to gradually grow its profits over the last couple of years as well.

How has it been able to do this? Let's take a look at whether it is only attributable to an industry uplift, or if Hindustan Petroleum has experienced some company-specific growth. Over the past few years, Hindustan Petroleum increased bottom-line, while its top-line declined, by successfully managing its costs. This resulted in to a margin expansion and profitability over time. Scanning growth from a sector-level, the IN oil and gas industry has been growing its average earnings by double-digit 46.94% over the previous year, and a more subdued 7.47% over the previous five years. This means whatever tailwind the industry is enjoying, Hindustan Petroleum is capable of leveraging this to its advantage.

What does this mean?

Hindustan Petroleum'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 Hindustan Petroleum to get a better picture of the stock by looking at:

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