Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Godrej Agrovet Limited's (NSE:GODREJAGRO) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Could GODREJAGRO beat the long-term trend and outperform its industry?
GODREJAGRO's trailing twelve-month earnings (from 31 March 2019) of ₹3.3b has jumped 45% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 10%, indicating the rate at which GODREJAGRO is growing has accelerated. What's the driver of this growth? Well, let’s take a look at whether it is solely a result of industry tailwinds, or if Godrej Agrovet has seen some company-specific growth.
In terms of returns from investment, Godrej Agrovet has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 8.6% exceeds the IN Food industry of 7.1%, indicating Godrej Agrovet has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Godrej Agrovet’s debt level, has declined over the past 3 years from 20% to 15%.
What does this mean?
Godrej Agrovet'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 Godrej Agrovet gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Godrej Agrovet to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for GODREJAGRO’s future growth? Take a look at our free research report of analyst consensus for GODREJAGRO’s outlook.
- Financial Health: Are GODREJAGRO’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 firstname.lastname@example.org. 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.