Tata Global Beverages Limited (NSE:TATAGLOBAL) Earnings: Did It Outperform The Industry?

Examining Tata Global Beverages Limited's (NSEI:TATAGLOBAL) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess TATAGLOBAL's latest performance announced on 31 December 2017 and weigh these figures against its longer term trend and industry movements. View our latest analysis for Tata Global Beverages

Was TATAGLOBAL weak performance lately part of a long-term decline?

I look at the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to examine different companies on a more comparable basis, using new information. For Tata Global Beverages, its most recent earnings (trailing twelve month) is IN₨4.68B, which, relative to last year’s figure, has dropped by -1.24%. Given that these figures are somewhat myopic, I have determined an annualized five-year figure for Tata Global Beverages's earnings, which stands at IN₨3.30B This means generally, Tata Global Beverages has been able to increase its earnings over the past couple of years.

How has it been able to do this? Well, let’s take a look at whether it is solely a result of an industry uplift, or if Tata Global Beverages has seen some company-specific growth. In the last few years, Tata Global Beverages top-line expansion has outstripped earnings and the growth rate of expenses. Though this has led to a margin contraction, it has softened Tata Global Beverages's earnings contraction. Viewing growth from a sector-level, the IN food industry has been growing its average earnings by double-digit 18.84% over the previous twelve months, and 14.01% over the last five years. This suggests that any uplift the industry is benefiting from, Tata Global Beverages has not been able to gain as much as its industry peers.

What does this mean?

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

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