Keep These 8 Things In Mind After Quarterly Results Of The Companies
Siddharth Khemka, Head, Retail Research, MoFSL
In today’s fast changing era, quarterly results of companies are very important to know the performance of companies. In such a situation, it is very important to pay attention to these 8 important things to know the quarterly results of any company.
1. Growth and Guidance
Revenue and total sales are the most important thing in any company. This gives an accurate idea of the true growth of the company. At the same time, it is also important to see whether this growth of the company is coming from volume or from pricing. From this it is known whether the growth of the company is happening from the ground level or from the power of the company, so that what is the power of the company in the industry can be ascertained.
2. Growth and Guidance in Profits
When it comes to quarterly results, net profit plays an important role here. In this it is necessary to see what is the quality of the earnings of the company. For example, whether this growth has happened due to immediate increase in the product of the company.
3. Earnings Quality for the Quarter
When we talk about quarterly profit and revenue, we should also take into account the quality of that earnings. For example, is this growth due to an immediate increase in the price of the product? Because it is not permanent. At the same time, it is also important to see whether this income is not due to excessive write-off. If this is the case then it is also not permanent for long. That is why it is very important to have quality in earning.
4. Comparing Yearly and Quarterly Basis
How is the profit of any company determined? Either it happens on an annual basis or on a quarterly basis. It depends on what basis the company analyzes itself. For example, telecom companies show their profits on a quarterly basis. Because they have to compete with their competitor on price. In such a case, you get to know the correct picture.
5. Comparison of Guidance for the last 4 quarters
The guidance given by most companies is also shown for the next few quarters. The same few companies like TCS do not give further guidance. Most Indian companies tell the way ahead by their quarterly results. Therefore, it is very important for you to pay attention to the guidance of any company.
6. Take care of management warnings and audit qualifications
We must pay attention to the company’s fine print and their announcements. Because on the basis of this we can prepare the road ahead. However, the auditors of the company raise some doubts in their audit reports. But this is necessary. Apart from this, we also need to take care of the announcements made by the management.
7. Operating Profit and Operating Margin
Operational metrics play an important role in the quarterly results of any company. For example, from the operation matrix itself, we get to know how stable the business of the company is. At the same time, you should also keep an eye on the margin so that you get all the information on time.
8. Shareholding Pattern and Pledged Shares
Generally, any significant information on this front is also disclosed in quarterly results. Although its direct effect is not visible on the performance of the company, but it cannot be ignored either. If you see high stock selling within the company during a quarter in the company, then it can be a matter of concern. At the same time, if the shares of the promoters of the company are being pledged more, then this also needs attention.
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