Assessing Coromandel International Limited’s (NSE:COROMANDEL) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess COROMANDEL’s latest performance announced on 31 December 2018 and evaluate these figures to its historical trend and industry movements.
How Did COROMANDEL’s Recent Performance Stack Up Against Its Past?
COROMANDEL’s trailing twelve-month earnings (from 31 December 2018) of ₹6.7b has declined by -8.5% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 17%, indicating the rate at which COROMANDEL is growing has slowed down. Why could this be happening? Let’s examine what’s transpiring with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, Coromandel International has invested its equity funds well leading to a 21% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 8.4% exceeds the IN Chemicals industry of 7.9%, indicating Coromandel International has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Coromandel International’s debt level, has increased over the past 3 years from 30% to 39%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 94% to 66% over the past 5 years.
What does this mean?
Though Coromandel International’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 affecting its business. You should continue to research Coromandel International to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for COROMANDEL’s future growth? Take a look at our free research report of analyst consensus for COROMANDEL’s outlook.
- Financial Health: Are COROMANDEL’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.
- 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 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.