The 15% return this week takes Harrisons Malayalam's (NSE:HARRMALAYA) shareholders five-year gains to 419%

For many, the main point of investing in the stock market is to achieve spectacular returns. While not every stock performs well, when investors win, they can win big. Just think about the savvy investors who held Harrisons Malayalam Limited (NSE:HARRMALAYA) shares for the last five years, while they gained 419%. This just goes to show the value creation that some businesses can achieve. It's also good to see the share price up 35% over the last quarter.

The past week has proven to be lucrative for Harrisons Malayalam investors, so let's see if fundamentals drove the company's five-year performance.

View our latest analysis for Harrisons Malayalam

Given that Harrisons Malayalam 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 Harrisons Malayalam saw its revenue grow at 6.6% per year. That's a pretty good long term growth rate. However, the share price gain of 39% during the period is considerably stronger. It might not be cheap but a (long-term) growth stock like this is usually well worth taking a closer look at.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling Harrisons Malayalam stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that Harrisons Malayalam has rewarded shareholders with a total shareholder return of 81% in the last twelve months. That's better than the annualised return of 39% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Case in point: We've spotted 3 warning signs for Harrisons Malayalam you should be aware of, and 1 of them is a bit unpleasant.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com