Shreyas Shipping and Logistics (NSE:SHREYAS) Posted Healthy Earnings But There Are Some Other Factors To Be Aware Of

Shreyas Shipping and Logistics Limited's (NSE:SHREYAS) robust earnings report didn't manage to move the market for its stock. We did some digging, and we found some concerning factors in the details.

See our latest analysis for Shreyas Shipping and Logistics

The Impact Of Unusual Items On Profit

To properly understand Shreyas Shipping and Logistics' profit results, we need to consider the ₹110m gain attributed to unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. If Shreyas Shipping and Logistics doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Shreyas Shipping and Logistics.

Our Take On Shreyas Shipping and Logistics' Profit Performance

Arguably, Shreyas Shipping and Logistics' statutory earnings have been distorted by unusual items boosting profit. Therefore, it seems possible to us that Shreyas Shipping and Logistics' true underlying earnings power is actually less than its statutory profit. The good news is that it earned a profit in the last twelve months, despite its previous loss. 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. If you'd like to know more about Shreyas Shipping and Logistics as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 4 warning signs for Shreyas Shipping and Logistics (of which 1 doesn't sit too well with us!) you should know about.

Today we've zoomed in on a single data point to better understand the nature of Shreyas Shipping and Logistics' 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.

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.

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