Today I will examine Kellton Tech Solutions Limited’s (NSE:KELLTONTEC) latest earnings update (30 June 2018) and compare these figures against its performance over the past couple of years, in addition to how the rest of KELLTONTEC’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.
Commentary On KELLTONTEC’s Past Performance
KELLTONTEC’s trailing twelve-month earnings (from 30 June 2018) of ₹735m has
jumped 31% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 45%, indicating the rate at which KELLTONTEC is growing has slowed down.
What could be happening here? Well,
let’s take a look at what’s
with margins and
is facing the same headwind.
In terms of returns from investment, Kellton Tech Solutions has
invested its equity funds well leading to a 28% return on equity (ROE), above the sensible minimum of 20%.
Furthermore, its return on assets (ROA) of 16% exceeds the IN IT industry of 7.9%, indicating Kellton Tech Solutions has used its assets more efficiently.
And finally, its return on capital (ROC), which also accounts for Kellton Tech Solutions’s debt level, has increased over the past 3 years from 24% to 29%.
What does this mean?
Though Kellton Tech Solutions’s past data is helpful, it is only one aspect of my investment thesis.
Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability?
I recommend you
continue to research Kellton Tech Solutions to get a
more holistic view
of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for KELLTONTEC’s future growth? Take a look at our free research report of analyst consensus for KELLTONTEC’s outlook.
- Financial Health: Are KELLTONTEC’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 30 June 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 email@example.com.
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