When Texmo Pipes and Products Limited’s (NSEI:TEXMOPIPES) announced its latest earnings (31 March 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Texmo Pipes and Products’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not TEXMOPIPES actually performed well. Below is a quick commentary on how I see TEXMOPIPES has performed. See our latest analysis for Texmo Pipes and Products
How Did TEXMOPIPES’s Recent Performance Stack Up Against Its Past?
I look at data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This enables me to assess various companies on a more comparable basis, using the most relevant data points. For Texmo Pipes and Products, its most recent trailing-twelve-month earnings is -₹4.87M, which, in comparison to the prior year’s level, has turned from positive to negative. Since these figures are relatively nearsighted, I’ve determined an annualized five-year value for TEXMOPIPES’s earnings, which stands at ₹35.61M.We can further examine Texmo Pipes and Products’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Texmo Pipes and Products’s top-line has grown by 15.93% on average, signalling that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Looking at growth from a sector-level, the IN chemicals industry has been growing its average earnings by double-digit 26.71% over the past twelve months, and 13.06% over the last five years. This suggests that whatever tailwind the industry is benefiting from, Texmo Pipes and Products has not been able to reap as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most valuable step is to examine company-specific issues Texmo Pipes and Products may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Texmo Pipes and Products to get a more holistic view of the stock by looking at:
- Financial Health: Is TEXMOPIPES’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.