Analyzing Hinduja Global Solutions Limited’s (NSEI:HGS) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess HGS’s recent performance announced on 30 September 2019 and compare these figures to its long-term trend and industry movements.
Was HGS’s recent earnings decline worse than the long-term trend and the industry?
HGS’s trailing twelve-month earnings (from 30 September 2019) of ₹1.8b has declined by -2.3% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 6.2%, indicating the rate at which HGS is growing has slowed down. Why is this? Well, let’s take a look at what’s occurring with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, Hinduja Global Solutions has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 6.0% is below the IN IT industry of 8.1%, indicating Hinduja Global Solutions’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Hinduja Global Solutions’s debt level, has declined over the past 3 years from 13% to 12%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I recommend you continue to research Hinduja Global Solutions to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for HGS’s future growth? Take a look at our free research report of analyst consensus for HGS’s outlook.
- Financial Health: Are HGS’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.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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