The Strong Earnings Posted By RateGain Travel Technologies (NSE:RATEGAIN) Are A Good Indication Of The Strength Of The Business

The subdued stock price reaction suggests that RateGain Travel Technologies Limited's (NSE:RATEGAIN) strong earnings didn't offer any surprises. Our analysis suggests that investors might be missing some promising details.

Check out our latest analysis for RateGain Travel Technologies

The Impact Of Unusual Items On Profit

For anyone who wants to understand RateGain Travel Technologies' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by ₹9.4m due to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. RateGain Travel Technologies took a rather significant hit from unusual items in the year to March 2022. As a result, we can surmise that the unusual items made its statutory profit significantly weaker than it would otherwise be.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On RateGain Travel Technologies' Profit Performance

As we discussed above, we think the significant unusual expense will make RateGain Travel Technologies' statutory profit lower than it would otherwise have been. Because of this, we think RateGain Travel Technologies' underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! And one can definitely find a positive in the fact that it made a profit this year, despite losing money last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example - RateGain Travel Technologies has 1 warning sign we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of RateGain Travel Technologies' profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.

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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.