In this article, I will take a look at GTPL Hathway Limited’s (BOM:540602) most recent earnings update (31 March 2018) and compare these latest figures against its performance over the past few years, along with how the rest of 540602’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. Check out our latest analysis for GTPL Hathway
How Did 540602’s Recent Performance Stack Up Against Its Past?540602’s trailing twelve-month earnings (from 31 March 2018) of ₹610.96m has jumped 51.66% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 9.18%, indicating the rate at which 540602 is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is merely because of industry tailwinds, or if GTPL Hathway has seen some company-specific growth.
The rise in earnings seems to be propelled by a solid top-line increase beating its growth rate of expenses. Though this has led to a margin contraction, it has made GTPL Hathway more profitable. Inspecting growth from a sector-level, the IN media industry has been growing its average earnings by double-digit 15.74% in the prior year, and 18.56% over the past half a decade. This means any tailwind the industry is profiting from, GTPL Hathway is capable of amplifying this to its advantage.In terms of returns from investment, GTPL Hathway has not invested its equity funds well, leading to a 8.20% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 5.24% is below the US tech industry of 7.84%, indicating GTPL Hathway’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for GTPL Hathway’s debt level, has increased over the past 3 years from 4.60% to 10.21%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 99.91% to 43.23% over the past 5 years.
What does this mean?
GTPL Hathway’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While GTPL Hathway has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research GTPL Hathway to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 540602’s future growth? Take a look at our free research report of analyst consensus for 540602’s outlook.
- Financial Health: Is 540602’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.