Does Navin Fluorine International Limited’s (NSE:NAVINFLUOR) Past Performance Indicate A Stronger Future?

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After looking at Navin Fluorine International Limited’s (NSE:NAVINFLUOR) latest earnings announcement (31 March 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Navin Fluorine International’s performance has been impacted by industry movements. In this article I briefly touch on my key findings.

See our latest analysis for Navin Fluorine International

Could NAVINFLUOR beat the long-term trend and outperform its industry?

NAVINFLUOR’s trailing twelve-month earnings (from 31 March 2018) of ₹1.8b has jumped 32% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 28%, indicating the rate at which NAVINFLUOR is growing has accelerated. How has it been able to do this? Let’s take a look at whether it is merely a result of industry tailwinds, or if Navin Fluorine International has seen some company-specific growth.

NSEI:NAVINFLUOR Income Statement, February 21st 2019
NSEI:NAVINFLUOR Income Statement, February 21st 2019

In terms of returns from investment, Navin Fluorine International has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 12% exceeds the IN Chemicals industry of 8.1%, indicating Navin Fluorine International has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Navin Fluorine International’s debt level, has increased over the past 3 years from 7.8% to 17%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 16% to 1.3% over the past 5 years.

What does this mean?

Though Navin Fluorine International’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Navin Fluorine International to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for NAVINFLUOR’s future growth? Take a look at our free research report of analyst consensus for NAVINFLUOR’s outlook.
  2. Financial Health: Are NAVINFLUOR’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 March 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 editorial-team@simplywallst.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.