With EPS Growth And More, Dalmia Bharat Sugar and Industries (NSE:DALMIASUG) Is Interesting

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.

In contrast to all that, I prefer to spend time on companies like Dalmia Bharat Sugar and Industries (NSE:DALMIASUG), which has not only revenues, but also profits. While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.

Check out our latest analysis for Dalmia Bharat Sugar and Industries

How Fast Is Dalmia Bharat Sugar and Industries Growing?

The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Impressively, Dalmia Bharat Sugar and Industries has grown EPS by 27% per year, compound, in the last three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.

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. Dalmia Bharat Sugar and Industries maintained stable EBIT margins over the last year, all while growing revenue 30% to ₹27b. That's a real positive.

In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.

Since Dalmia Bharat Sugar and Industries is no giant, with a market capitalization of ₹13b, so you should definitely check its cash and debt before getting too excited about its prospects.

Are Dalmia Bharat Sugar and Industries Insiders Aligned With All Shareholders?

I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. As a result, I'm encouraged by the fact that insiders own Dalmia Bharat Sugar and Industries shares worth a considerable sum. To be specific, they have ₹1.0b worth of shares. That's a lot of money, and no small incentive to work hard. Those holdings account for over 7.8% of the company; visible skin in the game.

Is Dalmia Bharat Sugar and Industries Worth Keeping An Eye On?

For growth investors like me, Dalmia Bharat Sugar and Industries's raw rate of earnings growth is a beacon in the night. Further, the high level of insider ownership impresses me, and suggests that I'm not the only one who appreciates the EPS growth. So this is very likely the kind of business that I like to spend time researching, with a view to discerning its true value. You still need to take note of risks, for example - Dalmia Bharat Sugar and Industries has 2 warning signs (and 1 which can't be ignored) we think you should know about.

Although Dalmia Bharat Sugar and Industries certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

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

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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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