Does Orient Green Power Company Limited's (NSE:GREENPOWER) Past Performance Indicate A Stronger Future?

Understanding Orient Green Power Company Limited's (NSEI:GREENPOWER) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Orient Green Power is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period. See our latest analysis for Orient Green Power

How GREENPOWER fared against its long-term earnings performance and its industry

To account for any quarterly or half-yearly updates, I 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 enables me to examine different stocks in a uniform manner using the latest information. For Orient Green Power, its most recent trailing-twelve-month earnings is -₹388.42M, which compared to last year’s level, has become less negative. Since these values may be somewhat myopic, I have created an annualized five-year value for GREENPOWER's net income, which stands at -₹1.09B. This suggests that, although net income is negative, it has become less negative over the years.

We can further assess Orient Green Power's loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Orient Green Power's top-line has risen by a mere 3.89%, on average. The company's inability to breakeven has been aided by the relatively flat top-line in the past. Inspecting growth from a sector-level, the IN renewable energy industry has been growing its average earnings by double-digit 25.18% over the prior twelve months, and a less exciting 4.91% over the past half a decade. This means that, even though Orient Green Power is presently unprofitable, it may have been aided by industry tailwinds, moving earnings into a more favorable position.

What does this mean?

Though Orient Green Power's past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most valuable step is to examine company-specific issues Orient Green Power may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Orient Green Power to get a better picture of the stock by looking at:

1. Financial Health: Is GREENPOWER’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. Valuation: What is GREENPOWER worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether GREENPOWER is currently mispriced by the market.
3. 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 March 2018. 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.