Despite shrinking by ₹5.2b in the past week, Shree Renuka Sugars (NSE:RENUKA) shareholders are still up 449% over 5 years

Long term investing can be life changing when you buy and hold the truly great businesses. While not every stock performs well, when investors win, they can win big. To wit, the Shree Renuka Sugars Limited (NSE:RENUKA) share price has soared 449% over five years. If that doesn't get you thinking about long term investing, we don't know what will. On top of that, the share price is up 13% in about a quarter. But this move may well have been assisted by the reasonably buoyant market (up 15% in 90 days).

Since the long term performance has been good but there's been a recent pullback of 4.8%, let's check if the fundamentals match the share price.

View our latest analysis for Shree Renuka Sugars

Shree Renuka Sugars wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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 Shree Renuka Sugars saw its revenue grow at 19% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 41%(per year) over the same period. Despite the strong run, top performers like Shree Renuka Sugars have been known to go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.

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

Take a more thorough look at Shree Renuka Sugars' financial health with this free report on its balance sheet.

A Different Perspective

Shree Renuka Sugars provided a TSR of 8.8% over the last twelve months. Unfortunately this falls short of the market return. If we look back over five years, the returns are even better, coming in at 41% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Shree Renuka Sugars you should be aware of.

Of course Shree Renuka Sugars 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.

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