Despite shrinking by ₹186m in the past week, Semac Construction (NSE:SEMAC) shareholders are still up 901% over 3 years

It can certainly be frustrating when a stock does not perform as hoped. But when the market is down, you're bound to have some losers. While the Semac Construction Limited (NSE:SEMAC) share price is down 49% in the last three years, the total return to shareholders (which includes dividends) was 901%. And that total return actually beats the market return of 61%. The falls have accelerated recently, with the share price down 18% in the last three months.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

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Given that Semac Construction didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last three years, Semac Construction's revenue dropped 29% per year. That means its revenue trend is very weak compared to other loss making companies. With revenue in decline, the share price decline of 14% per year is hardly undeserved. The key question now is whether the company has the capacity to fund itself to profitability, without more cash. Of course, it is possible for businesses to bounce back from a revenue drop - but we'd want to see that before getting interested.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

What About The Total Shareholder Return (TSR)?

We've already covered Semac Construction's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Semac Construction's TSR of 901% for the 3 years exceeded its share price return, because it has paid dividends.

A Different Perspective

We're pleased to report that Semac Construction shareholders have received a total shareholder return of 8.2% over one year. Having said that, the five-year TSR of 83% a year, is even better. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Semac Construction is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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

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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.