With EPS Growth And More, Abhishek Integrations (NSE:AILIMITED) 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. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

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). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

View our latest analysis for Abhishek Integrations

Abhishek Integrations' Improving Profits

Over the last three years, Abhishek Integrations has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. So it would be better to isolate the growth rate over the last year for our analysis. It's good to see that Abhishek Integrations' EPS has grown from ₹0.90 to ₹1.12 over twelve months. This amounts to a 24% gain; a figure that shareholders will be pleased to see.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for Abhishek Integrations remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 70% to ₹226m. That's a real positive.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Since Abhishek Integrations is no giant, with a market capitalisation of ₹181m, you should definitely check its cash and debt before getting too excited about its prospects.

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. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

One positive for Abhishek Integrations, is that company insiders spent ₹470k acquiring shares in the last year. This might not be a huge sum, but it's well worth noting anyway, given the complete lack of selling. 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.

Is Abhishek Integrations Worth Keeping An Eye On?

One important encouraging feature of Abhishek Integrations is that it is growing profits. While some companies are struggling to grow EPS, Abhishek Integrations seems free from that morose affliction. The cherry on top is the insider share purchases, which provide an extra impetus to keep and eye on this stock, at the very least. It is worth noting though that we have found 5 warning signs for Abhishek Integrations (3 are a bit concerning!) that you need to take into consideration.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Abhishek Integrations, you'll probably love this free list of growing companies that insiders are buying.

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.