Quarterly financial results.. important things to note..!

Listed companies publish their performance in quarterly financial statements to the stock market. Financial Year in India starts from 1st April and ends on 31st March. Thus the quarters are completed in June, September, December and March.The quarter is named after the month in which it is completed. Currently, listed companies are publishing their financial results after the end of the December quarter (October, November, December). With the end of the March quarter, companies publish their full financial position results for the financial year. It is a norm that the company should report the quarterly financial details to the stock exchanges within 45 days of the completion of the quarter. Those who have invested in the company and who are planning to invest should pay close attention to this financial statement. Quarterly financial result plays a very important role in weighing the performance of a company. Nowadays companies don't just publish quarterly results.They publish details in comparison with the same quarter of the previous year and also publish advance notice (Guidance) of how the company's performance will be in the next few quarters. Important points to note in quarterly financial results of companies are: (1) Income growth..! A company's total revenue growth or sales growth is very important. It needs to increase both in terms of numbers and value.For example, if the number of cars sold and the total sales volume of a car manufacturing company increases, it means that the company is doing very well. This is because the company's smaller cars are more in demand if the number increases and the sales volume decreases; It means there is no demand for big cars and luxury cars. This will reduce the profit growth of the company.Generally, if total sales increase, demand for that company's products is high; It means business is growing.An increase in net sales is also necessary. Net sales are net sales minus the value of unsold goods returned from gross sales. If its growth rate is high, it means that the company's sales are good. (2) Profit margin..! In the profit of a company, there are two types of operating profit and non-operating profit. Operating profit is what a company earns from its main activity.It is important to note how much this profit margin is. If it is high and increasing it means that the company is doing well. A higher ratio means that the company is managing its costs very well.This operating profit comes from the services the company provides and the products it sells. Rental income to a company from its buildings,Interest and dividend income from its investments and profit from sale of assets are non-operating income. This income is often not sustainable. So, there is no need to worry too much about this income. But, operating income is very important. It is imperative to observe its increase and profit margin.Operating profit is net sales minus operating expenses.Operating expenses include employee salaries, office building rent, electricity bills, etc. Research and development expenses of companies like pharma also come under operating expenses. (3) Net profit growth A company is a good company if its sales increase at the same time as its profits increase. Profit growth should have increased compared to the same quarter of the previous year. That too the net profit remaining after income tax, interest expense should be more. This should have increased compared to the same quarter of the previous year.If the net profit of a company is high, then the price of that company's stock is likely to increase more. (4) Management's opinion..! A quarterly financial report contains a management commentary on how the company's performance will be for the current quarter and for the next few quarters. Through this, it will be known how the company is planning for the coming years. So it is necessary to read it carefully. (5) Quarterly financial results and share price change..! Share prices often change when companies release their quarterly financial results. (6) A poor quarterly result; Share price increase..! When quarterly financial results are released, net profit becomes more important. In fact, if the company's profits and earnings undergo a sudden change, the share price undergoes an immediate change. Even if net profit and earnings differ from analysts' expectations, the change in share price is immediate. A company's net sales and net profit have declined significantly during the particular quarter. However, the share price has started to rise after the release of the quarterly financial report. In this situation, what is the reason for this should be analyzed and seen.Even if the financial performance of the company is poor, there are many reasons why the share price rises. Company gets new orders despite poor quarterly result; The company plans to significantly reduce its debt in the coming quarters; The stock price may increase due to further expansion.As the future of the company looks good even if the quarterly results are not good, long-term investors will start adding more shares to the stock. Thus, the price of the stock will start to rise. (7) Good quarter result, share price decline..! Likewise, if the company's share price falls after good quarterly results are released, one should know the reason and act accordingly. If quarterly results fall short of market expectations, the share price may fall. Stock prices may fall even if stockbrokers lower their target price.Don't sell a stock just because a company's performance is poor in one quarter. Stocks should be sold only if the company's performance has been deteriorating for 3-4 consecutive quarters.At the same time, if the company's business, management, and future are complicated, short-term, medium-term, and long-term investors may find it profitable to sell the stock and exit. (8) Stock related things to watch out for..! Quarterly financial results are important for those who have invested in the stock and are going to do so. Earnings Per Share (EPS) in a particular quarter, book value of a share, share capital increase or decrease i.e. founders,The price of the stock fluctuates depending on the details of foreign financial institutions, domestic financial institutions (insurance companies, mutual fund companies) invested and sold in the shares.Also, what percentage of the shares held by the promoters are mortgaged? Has it increased at the end of the quarter? It should be observed whether it has decreased. If mortgages continue to rise, problems like Satyam Computer are likely to arise. If the founder's share capital continues to decline, it is better to exit the company.If the founder keeps increasing the share capital in the company, it means that he has high confidence in the growth of the company. Investment in shares can be continued and increased.Investing in a stock or selling a stock should be done based on the business environment of the company, its future plans, fundamentals, sales and profit growth, debt reduction, cost reduction. Hope you will be paying close attention to quarterly financial statements? (9) Quarter-Annual comparison: how to do? A company's financial statements for a particular quarter should be compared with the previous quarter and the same quarter of the previous year. If there is growth in both these levels, it means that the company is on the right growth path. Some industries can operate on a cyclical basis, and it is best to compare the quarterly results of such companies with the same quarter of the previous year. (10) Interest expense expense and equity investment..! How much total debt does the company have at the end of the quarter? Note how much interest is charged on it. If the proceeds from the sale are too much to pay interest on the loan, avoid making new investments in that company's stock. If the stock price does not rise properly if already invested then it is profitable to gradually sell the stock and exit. (1)-Bajaj Holdings & Investment Ltd. operates as an Investment Company and is registered as a Non-Banking Financial Institution – Investment and Credit Company with the Reserve Bank of India.Company has reduced debt. Company is almost debt free. Company has been maintaining a healthy dividend payout of 24.0% (2)- Emami Paper Mills Limited is engaged in production of Newsprint, Writing & Printing Paper and Multilayer Coated High-end Packaging Boards.Company has delivered good profit growth of 35.2% CAGR over last 5 years (3)- Goldiam International Ltd is engaged in the business of manufacturing and exporting gold and diamond jewelry to global retailers. Company is almost debt free. Company has delivered good profit growth of 32.7% CAGR over last 5 years Company has been maintaining a healthy dividend payout of 22.4% (4)-Garware Hi-Tech Films Limited (Formally Known as Garware Polyester Limited) is the pioneer and the largest exporters of polyester films in India with an experience of 3 decades. Also it is the sole manufacture of Solar Control window films in India and among the only 2 companies in the world having patented technology for manufacturing the UV stabilized dyed films and the only Company in the world with backward integration for manufacturing of its own raw material and all components for manufacture of Solar control window films. [1] It is a market leader with more than 90% market share in Shrink film manufacturing in India. Company has reduced debt. Company is almost debt free. Company has delivered good profit growth of 37.2% CAGR over last 5 years (5)- Jindal Drilling & Industries, part of the Dharam Pal Jindal Group, is a leading Indian company in offshore drilling and allied services, including directional drilling and mud logging. Company has delivered good profit growth of 42.8% CAGR over last 5 years

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