Examining Uttam Value Steels Limited’s (NSEI:UTTAMVALUE) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess UTTAMVALUE’s latest performance announced on 31 March 2017 and compare these figures to its longer term trend and industry movements. View our latest analysis for Uttam Value Steels
Could UTTAMVALUE beat the long-term trend and outperform its industry?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to examine different companies on a more comparable basis, using the most relevant data points. For Uttam Value Steels, the most recent twelve-month earnings -₹5,108.2M, which compared to the prior year’s level, has become less negative. Given that these values may be fairly nearsighted, I have created an annualized five-year value for UTTAMVALUE’s net income, which stands at -₹1,178.9M. This means Uttam Value Steels has historically performed better than recently, though it seems like earnings are now heading back in the right direction again.
We can further assess Uttam Value Steels’s loss by looking at what’s going on in the industry as well as within the company. First, I want to quickly look into the line items. Revenue growth over the last few years has grown by a mere 2.21%. Given that top-line growth is also pretty stale the key to profitability in the future would be controlling cost growth rates. Viewing growth from a sector-level, the IN metals and mining industry has been growing its average earnings by double-digit 27.08% in the prior year, and a more muted 3.25% over the previous five years. This suggests that any tailwind the industry is enjoying, Uttam Value Steels has not been able to gain as much as its average peer.
What does this mean?
Though Uttam Value Steels’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to forecast what will occur going forward, and when. The most valuable step is to examine company-specific issues Uttam Value Steels may be facing and whether management guidance has steadily been met in the past. You should continue to research Uttam Value Steels to get a more holistic view of the stock by looking at:
1. Financial Health: Is UTTAMVALUE’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.
2. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.