Was K.C.P. Sugar and Industries Corporation Limited's (NSE:KCPSUGIND) Earnings Growth Better Than The Industry's?
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When K.C.P. Sugar and Industries Corporation Limited (NSE:KCPSUGIND) announced its most recent earnings (31 March 2019), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how K.C.P. Sugar and Industries performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see KCPSUGIND has performed.
Check out our latest analysis for K.C.P. Sugar and Industries
Could KCPSUGIND beat the long-term trend and outperform its industry?
KCPSUGIND's trailing twelve-month earnings (from 31 March 2019) of ₹163m has jumped 42% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.5%, indicating the rate at which KCPSUGIND is growing has accelerated. What's enabled this growth? Let's see whether it is only due to an industry uplift, or if K.C.P. Sugar and Industries has experienced some company-specific growth.
In terms of returns from investment, K.C.P. Sugar and Industries has fallen short of achieving a 20% return on equity (ROE), recording 5.5% instead. Furthermore, its return on assets (ROA) of 5.2% is below the IN Food industry of 6.7%, indicating K.C.P. Sugar and Industries's are utilized less efficiently. However, its return on capital (ROC), which also accounts for K.C.P. Sugar and Industries’s debt level, has increased over the past 3 years from 3.7% to 15%.
What does this mean?
Though K.C.P. Sugar and Industries's past data is helpful, it is only one aspect of my investment thesis. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There may be variables that are influencing the industry as a whole, thus the high industry growth rate over the same period of time. I recommend you continue to research K.C.P. Sugar and Industries to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for KCPSUGIND’s future growth? Take a look at our free research report of analyst consensus for KCPSUGIND’s outlook.
Financial Health: Are KCPSUGIND’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.
