Abhishek Integrations (NSE:AILIMITED) Ticks All The Boxes When It Comes To Earnings Growth

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Abhishek Integrations (NSE:AILIMITED). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Abhishek Integrations with the means to add long-term value to shareholders.

Check out our latest analysis for Abhishek Integrations

Abhishek Integrations' Earnings Per Share Are Growing

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That means EPS growth is considered a real positive by most successful long-term investors. Abhishek Integrations' shareholders have have plenty to be happy about as their annual EPS growth for the last 3 years was 60%. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Abhishek Integrations achieved similar EBIT margins to last year, revenue grew by a solid 48% to ₹246m. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

Abhishek Integrations isn't a huge company, given its market capitalisation of ₹226m. That makes it extra important to check on its balance sheet strength.

Are Abhishek Integrations Insiders Aligned With All Shareholders?

It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

In the last twelve months Abhishek Integrations insiders spent ₹470k on stock; good news for shareholders. While this isn't much, we also note an absence of sales. It is also worth noting that it was Chairman & MD Sanjay Dubey who made the biggest single purchase, worth ₹238k, paying ₹19.80 per share.

Does Abhishek Integrations Deserve A Spot On Your Watchlist?

Abhishek Integrations' earnings per share growth have been climbing higher at an appreciable rate. Most growth-seeking investors will find it hard to ignore that sort of explosive EPS growth. And may very well signal a significant inflection point for the business. If this these factors intrigue you, then an addition of Abhishek Integrations to your watchlist won't go amiss. It is worth noting though that we have found 3 warning signs for Abhishek Integrations (2 can't be ignored!) that you need to take into consideration.

The good news is that Abhishek Integrations is not the only growth stock with insider buying. Here's a list of growth-focused 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.