With 30% Earnings Growth, Did Zensar Technologies Limited (NSE:ZENSARTECH) Outperform The Industry?
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After reading Zensar Technologies Limited's (NSE:ZENSARTECH) most recent earnings announcement (31 March 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Zensar Technologies's performance has been impacted by industry movements. In this article I briefly touch on my key findings.
View our latest analysis for Zensar Technologies
Were ZENSARTECH's earnings stronger than its past performances and the industry?
ZENSARTECH's trailing twelve-month earnings (from 31 March 2019) of ₹3.1b has jumped 30% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 1.4%, indicating the rate at which ZENSARTECH is growing has accelerated. What's enabled this growth? Well, let’s take a look at whether it is solely owing to industry tailwinds, or if Zensar Technologies has seen some company-specific growth.
In terms of returns from investment, Zensar Technologies has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 11% exceeds the IN Software industry of 7.5%, indicating Zensar Technologies has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Zensar Technologies’s debt level, has declined over the past 3 years from 28% to 19%.
What does this mean?
Zensar Technologies'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 Zensar Technologies gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Zensar Technologies to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ZENSARTECH’s future growth? Take a look at our free research report of analyst consensus for ZENSARTECH’s outlook.
Financial Health: Are ZENSARTECH’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 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
