Are Harrisons Malayalam's (NSE:HARRMALAYA) Statutory Earnings A Good Reflection Of Its Earnings Potential?

As a general rule, we think profitable companies are less risky than companies that lose money. However, sometimes companies receive a one-off boost (or reduction) to their profit, and it's not always clear whether statutory profits are a good guide, going forward. In this article, we'll look at how useful this year's statutory profit is, when analysing Harrisons Malayalam (NSE:HARRMALAYA).

We like the fact that Harrisons Malayalam made a profit of ₹92.6m on its revenue of ₹3.87b, in the last year.

View our latest analysis for Harrisons Malayalam

Not all profits are equal, and we can learn more about the nature of a company's past profitability by diving deeper into the financial statements. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Harrisons Malayalam.

Our Take On Harrisons Malayalam's Profit Performance

Because of this, we think that it may be that Harrisons Malayalam's statutory profits are better than its underlying earnings power. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, Harrisons Malayalam has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

In this article we've looked at a number of factors that can impair the utility of profit numbers, as a guide to a business. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. 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. Simply Wall St has no position in any stocks mentioned.
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