Where Khadim India Limited (NSE:KHADIM) Stands In Terms Of Earnings Growth Against Its Industry

Today I will take a look at Khadim India Limited's (NSEI:KHADIM) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the specialty retail industry performed. As an investor, I find it beneficial to assess KHADIM’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. View our latest analysis for Khadim India

Did KHADIM's recent earnings growth beat the long-term trend and the industry?

I prefer to use the ‘latest twelve-month’ data, 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 method allows me to analyze many different companies in a uniform manner using the latest information. For Khadim India, its most recent earnings (trailing twelve month) is IN₨381.73M, which, against last year’s figure, has risen by 29.85%. Given that these values may be fairly myopic, I have estimated an annualized five-year value for KHADIM's earnings, which stands at IN₨147.68M This shows that, on average, Khadim India has been able to consistently improve its bottom line over the past few years as well.

What's enabled this growth? Well, let’s take a look at if it is only owing to an industry uplift, or if Khadim India has experienced some company-specific growth. In the past couple of years, Khadim India grew its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Eyeballing growth from a sector-level, the IN specialty retail industry has been growing its average earnings by double-digit 29.20% over the prior twelve months, and a more muted 9.01% over the past five. This suggests that any tailwind the industry is gaining from, Khadim India is capable of leveraging this to its advantage.

What does this mean?

Though Khadim India's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Khadim India gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Khadim India to get a better picture of the stock by looking at:

• 1. Financial Health: Is KHADIM’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.
• 2. 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 December 2017. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.