Despite shrinking by ₹2.4b in the past week, Indo Rama Synthetics (India) (NSE:INDORAMA) shareholders are still up 90% over 3 years

It hasn't been the best quarter for Indo Rama Synthetics (India) Limited (NSE:INDORAMA) shareholders, since the share price has fallen 18% in that time. But don't let that distract from the very nice return generated over three years. To wit, the share price did better than an index fund, climbing 90% during that period.

Although Indo Rama Synthetics (India) has shed ₹2.4b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

View our latest analysis for Indo Rama Synthetics (India)

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During three years of share price growth, Indo Rama Synthetics (India) moved from a loss to profitability. So we would expect a higher share price over the period.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It might be well worthwhile taking a look at our free report on Indo Rama Synthetics (India)'s earnings, revenue and cash flow.

A Different Perspective

It's good to see that Indo Rama Synthetics (India) has rewarded shareholders with a total shareholder return of 44% in the last twelve months. That's better than the annualised return of 12% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. For example, we've discovered 1 warning sign for Indo Rama Synthetics (India) that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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. 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.