Mayur Uniquoters' (NSE:MAYURUNIQ) Earnings Are Weaker Than They Seem

Investors were disappointed with Mayur Uniquoters Limited's (NSE:MAYURUNIQ) earnings, despite the strong profit numbers. Our analysis uncovered some concerning factors that we believe the market might be paying attention to.

View our latest analysis for Mayur Uniquoters

How Do Unusual Items Influence Profit?

For anyone who wants to understand Mayur Uniquoters' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from ₹164m worth of unusual items. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. Which is hardly surprising, given the name. If Mayur Uniquoters doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current 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 Mayur Uniquoters' Profit Performance

Arguably, Mayur Uniquoters' statutory earnings have been distorted by unusual items boosting profit. Because of this, we think that it may be that Mayur Uniquoters' statutory profits are better than its underlying earnings power. Nonetheless, it's still worth noting that its earnings per share have grown at 23% over the last three years. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. At Simply Wall St, we found 1 warning sign for Mayur Uniquoters and we think they deserve your attention.

This note has only looked at a single factor that sheds light on the nature of Mayur Uniquoters' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. 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.

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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.