Examining Tata Elxsi Limited’s (NSE:TATAELXSI) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess TATAELXSI’s latest performance announced on 30 September 2018 and weigh these figures against its longer term trend and industry movements.
Were TATAELXSI’s earnings stronger than its past performances and the industry?
TATAELXSI’s trailing twelve-month earnings (from 30 September 2018) of ₹2.9b has jumped 48% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 28%, indicating the rate at which TATAELXSI is growing has accelerated. How has it been able to do this? Let’s take a look at if it is solely a result of an industry uplift, or if Tata Elxsi has seen some company-specific growth.
In terms of returns from investment, Tata Elxsi has invested its equity funds well leading to a 35% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 26% exceeds the IN Software industry of 7.2%, indicating Tata Elxsi has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Tata Elxsi’s debt level, has declined over the past 3 years from 52% to 46%.
What does this mean?
Tata Elxsi’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Tata Elxsi gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Tata Elxsi to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for TATAELXSI’s future growth? Take a look at our free research report of analyst consensus for TATAELXSI’s outlook.
- Financial Health: Are TATAELXSI’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 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.