Nahar Spinning Mills (NSE:NAHARSPING) shareholder returns have been enviable, earning 319% in 3 years

Investing can be hard but the potential fo an individual stock to pay off big time inspires us. Not every pick can be a winner, but when you pick the right stock, you can win big. For example, the Nahar Spinning Mills Limited (NSE:NAHARSPING) share price is up a whopping 312% in the last three years, a handsome return for long term holders. It's also good to see the share price up 25% over the last quarter. But this could be related to the strong market, which is up 20% in the last three months.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Check out our latest analysis for Nahar Spinning Mills

Because Nahar Spinning Mills made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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.

Over the last three years Nahar Spinning Mills has grown its revenue at 11% annually. That's pretty nice growth. Some shareholders might think that the share price rise of 60% per year is a lucky result, considering the level of revenue growth. After a price rise like that many will have the business, and plenty of them will be wondering whether the price moved too high, too fast.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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 Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Nahar Spinning Mills' TSR for the last 3 years was 319%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Nahar Spinning Mills' TSR for the year was broadly in line with the market average, at 41%. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 33%. It is possible that management foresight will bring growth well into the future, even if the share price slows down. It's always interesting to track share price performance over the longer term. But to understand Nahar Spinning Mills better, we need to consider many other factors. Take risks, for example - Nahar Spinning Mills has 2 warning signs (and 1 which is a bit concerning) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.