Euro India Fresh Foods (NSE:EIFFL) jumps 11% this week, though earnings growth is still tracking behind five-year shareholder returns

If you buy and hold a stock for many years, you'd hope to be making a profit. But more than that, you probably want to see it rise more than the market average. But Euro India Fresh Foods Limited (NSE:EIFFL) has fallen short of that second goal, with a share price rise of 83% over five years, which is below the market return. On a brighter note, more newer shareholders are probably rather content with the 53% share price gain over twelve months.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

See our latest analysis for Euro India Fresh Foods

We don't think that Euro India Fresh Foods' modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

For the last half decade, Euro India Fresh Foods can boast revenue growth at a rate of 9.0% per year. That's a pretty good long term growth rate. The annual gain of 13% over five years is better than nothing, but falls short of the market. You could even argue that the share price was over optimistic, previously.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Euro India Fresh Foods' earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Euro India Fresh Foods shareholders have received a total shareholder return of 53% over one year. That's better than the annualised return of 13% 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. It's always interesting to track share price performance over the longer term. But to understand Euro India Fresh Foods better, we need to consider many other factors. For instance, we've identified 3 warning signs for Euro India Fresh Foods (1 is a bit unpleasant) that you should be aware of.

Of course Euro India Fresh Foods 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.