Did You Miss Bombay Rayon Fashions' (NSE:BRFL) Impressive 196% Share Price Gain?

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Bombay Rayon Fashions Limited (NSE:BRFL) share price has soared 196% return in just a single year. It's also good to see the share price up 24% over the last quarter. But this could be related to the strong market, which is up 18% in the last three months. Unfortunately the longer term returns are not so good, with the stock falling 82% in the last three years.

See our latest analysis for Bombay Rayon Fashions

Bombay Rayon Fashions wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. 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.

Bombay Rayon Fashions actually shrunk its revenue over the last year, with a reduction of 61%. So we would not have expected the share price to rise 196%. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

This free interactive report on Bombay Rayon Fashions' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Bombay Rayon Fashions has rewarded shareholders with a total shareholder return of 196% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 14% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Bombay Rayon Fashions better, we need to consider many other factors. For example, we've discovered 3 warning signs for Bombay Rayon Fashions (1 doesn't sit too well with us!) that you should be aware of before investing here.

But note: Bombay Rayon Fashions 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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