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Ingersoll-Rand (India) Limited (NSE:INGERRAND): Did It Outperform The Industry?
Today I will examine Ingersoll-Rand (India) Limited’s (
) latest earnings update (31 March 2018) and compare these figures against its performance over the past couple of years, in addition to how the rest of INGERRAND’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time.
View our latest analysis for Ingersoll-Rand (India)
Did INGERRAND beat its long-term earnings growth trend and its industry?
INGERRAND’s trailing twelve-month earnings (from 31 March 2018) of ₹888.88m hasjumped 15.03% compared to the previous year.Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -0.63%, indicating the rate at which INGERRAND is growing has accelerated.What’s the driver of this growth?Let’s take a look atifit ismerelya result ofindustry tailwinds,or if Ingersoll-Rand (India) hasexperiencedsome company-specific growth.
Over thepastcouple of years,Ingersoll-Rand (India) top-line expansion hasovertakenearnings and the growth rate of expenses. Though thisbrought abouta margin contraction, it hascushionedIngersoll-Rand (India)’s earnings contraction.Eyeballinggrowth from a sector-level, theINmachinery industry has beengrowing its average earnings by double-digit 19.31%in theprioryear,and amore muted4.09% over thepast half a decade.This growth is amedian of profitable companiesof 25 Machinery companies in IN including Trans Freight Containers, A & M Febcon and SML Isuzu.This means thatanyupliftthe industry isprofiting from,Ingersoll-Rand (India) has not been able torealize the gains unlike itsaverage peer.
NSEI:INGERRAND Income Statement Export August 10th 18
In terms of returns from investment, Ingersoll-Rand (India) hasnot invested its equity funds well, leading to a 7.88% return on equity (ROE), below the sensible minimum of 20%.Furthermore, its return on assets (ROA) of 2.72% is below the IN Machinery industry of 6.72%, indicating Ingersoll-Rand (India)’s are utilized less efficiently.However, its return on capital (ROC), which also accounts for Ingersoll-Rand (India)’s debt level, has increased over the past 3 years from 9.02% to 11.66%.
While past data is useful, it doesn’t tell the whole story.While Ingersoll-Rand (India) has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future.I suggest youcontinue to research Ingersoll-Rand (India) to get abetter pictureof the stock by looking at:
: Are INGERRAND’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our
: What is INGERRAND worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The
intrinsic value infographic in our free research report
helps visualize whether INGERRAND is currently mispriced by the market.
: Are there other stocks that provide better prospects with proven track records? Explore our Rand Price In India
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.
To help readers see past 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. For errors that warrant correction please contact the editor at
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