Does Advani Hotels & Resorts (India) Limited's (NSE:ADVANIHOTR) Past Performance Indicate A Stronger Future?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

When Advani Hotels & Resorts (India) Limited (NSE:ADVANIHOTR) released its most recent earnings update (31 March 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Advani Hotels & Resorts (India)'s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not ADVANIHOTR actually performed well. Below is a quick commentary on how I see ADVANIHOTR has performed.

View our latest analysis for Advani Hotels & Resorts (India)

Were ADVANIHOTR's earnings stronger than its past performances and the industry?

ADVANIHOTR's trailing twelve-month earnings (from 31 March 2019) of ₹114m has jumped 32% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 20%, indicating the rate at which ADVANIHOTR is growing has accelerated. What's the driver of this growth? Let's see whether it is merely attributable to industry tailwinds, or if Advani Hotels & Resorts (India) has seen some company-specific growth.

NSEI:ADVANIHOTR Income Statement, June 12th 2019

In terms of returns from investment, Advani Hotels & Resorts (India) has invested its equity funds well leading to a 21% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 15% exceeds the IN Hospitality industry of 6.5%, indicating Advani Hotels & Resorts (India) has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Advani Hotels & Resorts (India)’s debt level, has declined over the past 3 years from 21% to 20%.

What does this mean?

Advani Hotels & Resorts (India)'s track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Advani Hotels & Resorts (India) has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Advani Hotels & Resorts (India) to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for ADVANIHOTR’s future growth? Take a look at our free research report of analyst consensus for ADVANIHOTR’s outlook.
  2. Financial Health: Are ADVANIHOTR’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.
  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 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.