With EPS Growth And More, Annapurna Swadisht (NSE:ANNAPURNA) Makes An Interesting Case
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Annapurna Swadisht (NSE:ANNAPURNA). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Annapurna Swadisht with the means to add long-term value to shareholders.
Annapurna Swadisht's Improving Profits
Annapurna Swadisht has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. Thus, it makes sense to focus on more recent growth rates, instead. It's good to see that Annapurna Swadisht's EPS has grown from ₹9.61 to ₹11.21 over twelve months. That's a 17% gain; respectable growth in the broader scheme of things.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Annapurna Swadisht maintained stable EBIT margins over the last year, all while growing revenue 34% to ₹4.5b. That's progress.
The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.
See our latest analysis for Annapurna Swadisht
Annapurna Swadisht isn't a huge company, given its market capitalisation of ₹4.7b. That makes it extra important to check on its balance sheet strength.
Are Annapurna Swadisht Insiders Aligned With All Shareholders?
Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
Annapurna Swadisht top brass are certainly in sync, not having sold any shares, over the last year. But more importantly, CEO & Whole-Time Director Manoj Sharma spent ₹4.9m acquiring shares, doing so at an average price of ₹266. Strong buying like that could be a sign of opportunity.
These recent buys aren't the only encouraging sign for shareholders, as a look at the shareholder registry for Annapurna Swadisht will reveal that insiders own a significant piece of the pie. Indeed, with a collective holding of 78%, company insiders are in control and have plenty of capital behind the venture. Intuition will tell you this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. In terms of absolute value, insiders have ₹3.7b invested in the business, at the current share price. So there's plenty there to keep them focused!
Is Annapurna Swadisht Worth Keeping An Eye On?
One positive for Annapurna Swadisht is that it is growing EPS. That's nice to see. In addition, insiders have been busy adding to their sizeable holdings in the company. These factors alone make the company an interesting prospect for your watchlist, as well as continuing research. What about risks? Every company has them, and we've spotted 3 warning signs for Annapurna Swadisht (of which 1 is a bit unpleasant!) you should know about.
The good news is that Annapurna Swadisht is not the only stock with insider buying. Here's a list of small cap, undervalued companies in IN with insider buying in the last three months!
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.