Result is one of the most important events that happens 4 times a year. At the end of every quarter the companies present their results and performance till date. This helps the investors as well as the traders to decide the fate of the company and also its potential for further growth. The most important thing around this time is the volatility that increases in the entire market. The reason is with the result effect the investors take out their money and start looking for more return generating companies. They always move aside their money in such times. Also the traders increase the proportion of shorting and buying the stocks in such times.
Due to the results one can notice high price fluctuations. Thus following such trends the entire Indian market changes the portfolio or in other words alters the portfolio based on the results.
Recent Result Announcements
Some of the major results announcements come from Bajaj Finance, Nestle, HCL Tech, ACC, L&T Infotech, HDFC Bank, ICICI Bank, Hind Zinc, CRISIL and others.
Let’s first see the way companies present their results. The entire gist is covered in one line through the most important figures. These figures are Revenue, Sales and Profit. However in some cases these figures can change on the basis of the major news. If a company is unable to post better profit than it tries to undermine this news through other great happenings for the current quarter. Thus every company presents its results in the most positive way it can.
For instance in the results of HCL Tech the company focussed on Profit and Revenue. The reason was Profit increased for more than 3 times this quarter. Similarly for Bajaj Finance profits was the key feature as it increased by 75%. However for Nestle it tried to undermine its profit figures as it saw a decline of 1.3% in the same. For L&T Technology Revenue was a highlight as it increased by 31% this year.
Key Highlights to Focus While Analysing Results
Hence every company has its own way of describing the results. However as investors and traders we should look at some of the most important figures. They are Operating Profit, Profit after tax, EBITDA, Revenue, Sales Figures, Investments, reserves and Surplus, Dividend Payout ratio, Company Objectives and Targets for the entire year and for the next quarter. Hence all such things bear the most important part in the company results.
For analysing the company’s performance there are multiple techniques that need to be applied together. Firstly one should always consider every increase or decrease in form of percentage. The reason is a company can be big or small but the percentage change in figures can be taken as a common base across the entire segment.
Individual Company Analysis
So firstly before analysing the results of one particular company, an individual should look at the particular segment’s performance. The results of every company in that segment depicts a common tone and hence this becomes an industrial average. With such an average the results of the company to be analysed should be compared.
Post that one should compare the results and all the financial figures. The comparison should be done with the results posted by the same company in the previous quarter and also in the same quarter for the previous financial year. In other words if we analyse the results for March 2022 then Dec 2021 results should be compared. Also the March 2021 quarter results should be taken into account. This helps us to understand how the company is working. Whether it is showing a good amount of growth or not ?
Also one should keep an eye on the board minutes as they contain important information of recent ongoing work inside the company. Hence all such factors may assist to know the company and its current position in a better way.
Objectives and Targets
Every company sets a track record for itself in a run for more than a decade. The companies always mention a target and an objective they want to achieve this year or this year. Thus it should be important for the company to achieve that because it shows how much stickler the company is to its assumptions. It also shows that the company is good at assuming the future for itself and hence gives a good positive impact of the board on the shareholders.
Balancing Portfolio
One should always try to analyse the companies and spin off their money every 3rd quarter of the year. A quick change of money may not render genuine returns as assumed. However one should also look at the dividend payout ratio and keep companies giving good dividends in their portfolio. This could ensure some definite earnings for the shareholders regardless of the company’s resistance. The reason is most of the colonies don’t like to change their dividend payout ratio very often. Hence balancing a portfolio with various segments and market cap of companies can ensure good returns and a balanced risk appetite.
