Those who invested in Indian Railway Catering & Tourism (NSE:IRCTC) a year ago grew by 30%

These days, it’s easy to just buy an index fund, and your returns should (roughly) match the market. But investors can boost returns by choosing companies that beat the market to own stocks. For example, the Indian Railway Catering & Tourism Corporation Limited (NSE: IRCTC) The stock price has risen 29% over the past year, clearly outperforming the market yield of around 7.0% (excluding dividends). This should therefore make shareholders smile. Indian Railway Catering & Tourism hasn’t been listed for a long time, so it’s not yet clear if it’s a long-term winner.

Let’s take a look at the longer term underlying fundamentals and see if they have been consistent with shareholder returns.

See our latest analysis for Indian Railway Catering & Tourism

To quote Buffett, “Ships will circumnavigate the globe, but the Flat Earth Society will prosper. There will continue to be wide gaps between price and value in the market…’ By comparing earnings per share (EPS) and share price changes over time, we can get an idea changes in investors’ attitude towards a company over time.

Indian Railway Catering & Tourism was able to increase EPS by 255% in the last twelve months. This EPS growth is significantly higher than the 29% increase in share price. So it looks like the market has cooled down on Indian Railway Catering & Tourism, despite the growth. Interesting. That said, the market remains bullish given the P/E ratio of 77.43.

The graph below illustrates the evolution of EPS over time (reveal the exact values ​​by clicking on the image).

NSEI: IRCTC Earnings Per Share Growth, August 6, 2022

It’s probably worth noting that the CEO is paid less than the median at companies of a similar size. But while it’s still worth checking out CEO compensation, the really important question is whether the company can increase its profits in the future. It might be interesting to take a look at our free Indian Railway Catering & Tourism earnings, revenue and cash flow report.

A different perspective

It’s nice to see that Indian Railway Catering & Tourism shareholders have gained 30% over the past year, including dividends. We regret to report that the share price is down 8.8% over ninety days. Short-term stock price fluctuations often mean little to the company itself. It is always interesting to follow the evolution of the share price over the long term. But to better understand Indian Railway Catering & Tourism, we need to consider many other factors. Take for example the ubiquitous specter of investment risk. We have identified 1 warning sign with Indian Railway Catering & Tourism, and understanding them should be part of your investment process.

Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of companies that we believe will increase their profits.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on IN exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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