Stock Analysis

Do Osia Hyper Retail's (NSE:OSIAHYPER) Earnings Warrant Your Attention?

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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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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 Osia Hyper Retail (NSE:OSIAHYPER). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

See our latest analysis for Osia Hyper Retail

How Fast Is Osia Hyper Retail Growing Its Earnings Per Share?

Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So EPS growth can certainly encourage an investor to take note of a stock. It's good to see that Osia Hyper Retail's EPS has grown from ₹0.92 to ₹1.07 over twelve months. There's little doubt shareholders would be happy with that 15% gain.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note Osia Hyper Retail achieved similar EBIT margins to last year, revenue grew by a solid 38% to ₹7.3b. 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.

NSEI:OSIAHYPER Earnings and Revenue History March 16th 2023

Since Osia Hyper Retail is no giant, with a market capitalisation of ₹3.8b, you should definitely check its cash and debt before getting too excited about its prospects.

Are Osia Hyper Retail Insiders Aligned With All Shareholders?

Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So as you can imagine, the fact that Osia Hyper Retail insiders own a significant number of shares certainly is appealing. To be exact, company insiders hold 78% of the company, so their decisions have a significant impact on their investments. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. To give you an idea, the value of insiders' holdings in the business are valued at ₹3.0b at the current share price. So there's plenty there to keep them focused!

Is Osia Hyper Retail Worth Keeping An Eye On?

As previously touched on, Osia Hyper Retail is a growing business, which is encouraging. For those who are looking for a little more than this, the high level of insider ownership enhances our enthusiasm for this growth. These two factors are a huge highlight for the company which should be a strong contender your watchlists. You should always think about risks though. Case in point, we've spotted 3 warning signs for Osia Hyper Retail you should be aware of, and 1 of them is potentially serious.

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a free list of them here.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Valuation is complex, but we're helping make it simple.

Find out whether Osia Hyper Retail is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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