IFGL Refractories (NSE:IFGLEXPOR) Is Posting Promising Earnings But The Good News Doesn’t Stop There

IFGL Refractories Limited's (NSE:IFGLEXPOR) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. We did some analysis to find out why and believe that investors might be missing some encouraging factors contained in the earnings.

View our latest analysis for IFGL Refractories

The Impact Of Unusual Items On Profit

For anyone who wants to understand IFGL Refractories' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ₹144m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If IFGL Refractories doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On IFGL Refractories' Profit Performance

Because unusual items detracted from IFGL Refractories' earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think IFGL Refractories' earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 25% annually, over the last three years. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. So while earnings quality is important, it's equally important to consider the risks facing IFGL Refractories at this point in time. At Simply Wall St, we found 1 warning sign for IFGL Refractories and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of IFGL Refractories' profit. 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 with high insider ownership.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com