Examining V-Mart Retail Limited’s (NSE:VMART) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess VMART’s latest performance announced on 31 March 2018 and weigh these figures against its longer term trend and industry movements. Check out our latest analysis for V-Mart Retail
How Did VMART’s Recent Performance Stack Up Against Its Past?
VMART’s trailing twelve-month earnings (from 31 March 2018) of ₹777.04m has jumped 76.99% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 22.47%, indicating the rate at which VMART is growing has accelerated. What’s enabled this growth? Well, let’s take a look at whether it is only attributable to industry tailwinds, or if V-Mart Retail has experienced some company-specific growth.
In the past couple of years, V-Mart Retail expanded its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Inspecting growth from a sector-level, the IN multiline retail industry has been growing its average earnings by double-digit 48.49% over the past year, and 37.34% over the past five. This growth is a median of profitable companies of 10 Multiline Retail companies in IN including Future Retail, Future Retail and V2 Retail. This means that any uplift the industry is profiting from, V-Mart Retail is able to leverage this to its advantage.
NSEI:VMART Income Statement July 10th 18 In terms of returns from investment, V-Mart Retail has invested its equity funds well leading to a 22.37% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 14.02% exceeds the IN Multiline Retail industry of 8.13%, indicating V-Mart Retail has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for V-Mart Retail’s debt level, has increased over the past 3 years from 25.90% to 31.21%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 23.98% to 1.60% over the past 5 years.
What does this mean?
V-Mart Retail’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research V-Mart Retail to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for VMART’s future growth? Take a look at our free research report of analyst consensus for VMART’s outlook.
- Financial Health: Is VMART’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 2018. This may not be consistent with full year annual report figures.
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