Reflecting on Emami Paper Mills' (NSE:EMAMIPAP) Share Price Returns Over The Last Year

The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the Emami Paper Mills Limited (NSE:EMAMIPAP) share price is down 14% in the last year. That's disappointing when you consider the market declined 0.5%. Emami Paper Mills hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time.

Check out our latest analysis for Emami Paper Mills

Emami Paper Mills isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Emami Paper Mills' revenue didn't grow at all in the last year. In fact, it fell 14%. That's not what investors generally want to see. Shareholders have seen the share price drop 14% in that time. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at Emami Paper Mills' financial health with this free report on its balance sheet.

A Different Perspective

We doubt Emami Paper Mills shareholders are happy with the loss of 14% over twelve months. That falls short of the market, which lost 0.5%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 9.4% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand Emami Paper Mills better, we need to consider many other factors. For example, we've discovered 3 warning signs for Emami Paper Mills (2 shouldn't be ignored!) that you should be aware of before investing here.

But note: Emami Paper Mills may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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This article by Simply Wall St is general in nature. 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.
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