Despite shrinking by ₹1.6b in the past week, Centrum Capital (NSE:CENTRUM) shareholders are still up 63% over 5 years

Centrum Capital Limited (NSE:CENTRUM) shareholders might be concerned after seeing the share price drop 23% in the last quarter. But at least the stock is up over the last five years. However we are not very impressed because the share price is only up 63%, less than the market return of 152%.

Since the long term performance has been good but there's been a recent pullback of 10%, let's check if the fundamentals match the share price.

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Given that Centrum Capital 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. When a company doesn't make profits, we'd generally hope to see good 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.

In the last 5 years Centrum Capital saw its revenue grow at 30% per year. That's well above most pre-profit companies. It's nice to see shareholders have made a profit, but the gain of 10% over the period isn't that impressive compared to the overall market. You could argue the market is still pretty skeptical, given the growing revenues. It could be that the stock was previously over-priced - but if you're looking for underappreciated growth stocks, these numbers indicate that there might be an opportunity here.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

Centrum Capital shareholders are down 8.2% for the year, but the market itself is up 6.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 10%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Centrum Capital you should know about.

Of course Centrum Capital may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.