Yahoo Finance Where Universal Cables Limited (NSE:UNIVCABLES) Stands In Terms Of Earnings Growth Against Its Industry
After looking at Universal Cables Limited’s (NSEI:UNIVCABLES) latest earnings announcement (31 March 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. Check out our latest analysis for Universal Cables
Could UNIVCABLES beat the long-term trend and outperform its industry?
I look at 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 method allows me to assess various companies in a uniform manner using new information. For Universal Cables, its most recent trailing-twelve-month earnings is ₹826.96M, which, relative to the previous year’s figure, has climbed up by 47.10%. Since these figures may be relatively short-term, I’ve estimated an annualized five-year figure for Universal Cables’s net income, which stands at -₹31.40M This means that, on average, Universal Cables has been able to consistently raise its profits over the last few years as well.
How has it been able to do this? Let’s take a look at whether it is solely attributable to industry tailwinds, or if Universal Cables has seen some company-specific growth. Over the past couple of years, Universal Cables expanded its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the IN electrical industry has been growing its average earnings by double-digit 28.75% over the prior year, and 14.80% over the last five years. This suggests that whatever uplift the industry is enjoying, Universal Cables is capable of leveraging this to its advantage.
What does this mean?
Though Universal Cables’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Universal Cables to get a better picture of the stock by looking at:
Financial Health: Is UNIVCABLES’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 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass 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.
